4. The Carbon Economy: A Brave New World?

Many regions throughout the world have adopted some form of carbon market mechanism, such as carbon trading (cap and trade) or taxes. As the outcome of the Copenhagen accord, the European Commission has set the new carbon emission target at 30% by 2020, up from 20%. In the United States the Securities and Exchange Commission (SEC) recognizes the issues of ‘climate change-related risks’, and asks companies to disclose ‘material climate risks’. Even in large carbon emitting countries that have not signed or are opting out of the Kyoto accord, administrative areas are adopting market-based incentives to reduce carbon emissions from various industries. In December 2011, Canada opted out of the Kyoto protocol; however, in 2008, the Canadian province of British Columbia implemented a carbon tax, starting from $10 per tonne of carbon dioxide, then increasing gradually to the current price of $30 per tonne. It has been very effective in tackling the root cause of carbon pollution—the burning of fossil fuels. Since the tax came into effect, fuel use in British Columbia has dropped by 16 per cent while in the rest of Canada, it has risen by 3 per cent. A recent survey by Statistics Canada shows that within just six years of implementation, British Columbia’s policy has been an environmental and economic success. In 2012, the province of Quebec (Canada) announced that it had joined California’s existing carbon trading scheme by imposing a cap on energy intensive industries’ greenhouse gas emissions (e.g., mining, cement, utility and manufacturing industries).