12 Questions
What is the purpose of implementing a price on carbon?
To shift the burden of GHG emissions to those responsible and reduce emissions in the most flexible and least costly way
What are the two main ways to price carbon?
Emissions trading and carbon taxes
What is the difference between an ETS and a carbon tax?
An ETS creates a market price for GHG emissions while a carbon tax directly sets a price on carbon
What is the purpose of a cap-and-trade emissions trading system?
To establish a market price for GHG emissions and ensure required emission reductions take place at lowest costs
What percentage of annual global GHG emissions are covered by carbon pricing schemes in place?
23%
What is carbon leakage?
The process in which carbon-intensive industry re-locates to a country with low/no carbon prices to avoid costs
What is a Carbon Border Adjustment Mechanism (CBAM)?
A tariff on imported goods linked to the carbon footprint of the product and the carbon price difference between the country of production and consumption
What is a social cost of carbon (SCC)?
A holistic calculation of the costs of CO2 and other GHG emissions on a rate-per-tonne basis
What is an internal carbon price (ICP)?
A voluntary price set by an organization to be applied to their own activities to establish a monetary value for a set unit of GHG emissions
What is the goal of implementing an internal carbon price (ICP)?
To implement the corporate's decarbonisation strategy and/or prepare the business for the introduction of a mandatory carbon price
What is the role of the Interagency Working Group (IWG) in the USA?
To develop uniform estimates of the social cost of carbon (SCC) to ensure that agencies utilize the best available science and economics
What is the difference between a carbon border tax and a Carbon Border Adjustment Mechanism (CBAM)?
A CBAM compensates producers for their carbon costs related to products exported to countries with a low/no carbon price, while a carbon border tax does not
Test your knowledge on the importance of pricing carbon emissions and its impact on reducing greenhouse gas emissions. Learn about the benefits of reflecting the true costs of climate impacts and low-carbon energy options in production and consumption choices. Find out how a price on carbon can shift the burden back to those responsible for GHG emissions, and ultimately help reduce emissions for a sustainable future.
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