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Weekly Short
29 May, 2020
We’ve written before that a crisis is a terrible thing to waste. And nowhere is this truer than on the question of carbon pricing.
We’ve long been supporters of a tax on carbon as a simple and efficient way to create structural change. Taxation encouraging businesses and consumers to internalise the environmental costs of fossil fuel consumption, whilst also raising much-needed revenue for green investments.
But right now, the balance is tipped even more in its favour. With energy prices at an all–time low, the immediate impact of the tax on consumers would be minimal. Fossil fuel companies are already in the process of rethinking their long-term strategy and reducing recruitment due to the pandemic. And, as the Economist argues, the decreasing cost of renewables in recent years means that a small shift in energy prices could give renewables a decisive financial advantage.
Added to all this is the fact that we find it easiest to change our behaviours and habits at times when we are already experiencing disruption. It’s our current openness to change that makes the notion of ‘building back better’ such an exciting one.
The practicalities of implementing carbon pricing may be a taxing question. But for us, the benefits are a no brainer. And there’s never been a better time than now.
By Sarah Howden