While the negotiations were once again stalled at COP25 in Madrid, the question of the most relevant policy instruments to limit global warming is back on the table. This question is particularly relevant for companies: how can we encourage them to engage in a low-carbon transition?

The idea advocated by orthodox economists is to introduce a single global price for carbon, through a tax on CO2 emissions. This proposal has been deemed unrealistic by many observers, who point out that there will always be countries that want to set up tax havens to attract more carbon-intensive activities; not to mention the redistribution problems that would be caused by setting up such a mechanism, both nationally and internationally, for the most fragile and carbon-dependent populations.

The article is available in French

 

 

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