Fine-tuning the carbon market

Letter to the Editor
The Washington Post
Published May 9, 2013

Regarding the May 6 front-page article “Europe’s carbon market goes bust”:

In evaluating Europe’s cap-and-trade system, it’s important to distinguish means (a carbon price) from ends (carbon reductions). Europe’s carbon price is low in large part because a prolonged recession and complementary policies have reduced fossil-based energy demand and, in turn, demand for carbon allowances. The carbon market, in other words, has adjusted to the current economic reality, just the way a market should.Despite low carbon prices, Europe is on track to outperform its carbon emissions targets for 2020. Indeed, Europe’s carbon intensity (emissions per unit of gross domestic product) is about a third lower than that of the United States, and Europe’s per-capita emissions are roughly half ours.

Europe’s experience provides important lessons for those introducing carbon pricing systems elsewhere. The key lesson is to refine — not abandon — this market-based approach.Eileen Claussen, Arlington
The writer is president of the Center for Climate and Energy Solutions.

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