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Places where carbon pricing is working
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In 2009, 10 states, including New York and Massachusetts, worked together to put a price on carbon. They used the other type of carbon pricing: cap-and-trade. Their system is known as RGGI (Regional Greenhouse Gas Initiative), or “Reggie.”
How it worked: Electricity producers started burning way less coal and started using more natural gas and renewable energy, which reduced greenhouse gas emissions.
Key fact: “Reggie” improved public health. Less coal meant less soot, and these states avoided more than US$5 billion worth of asthma attacks, hospital visits, chronic illnesses and premature deaths.
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Sweden has had a carbon tax since 1991. It started at €25 per tonne of greenhouse gases and is now €120 per tonne, the highest carbon tax in the world. Since implementing carbon pricing, Sweden’s economy has grown well above the European average.
How it worked: Businesses and homes started using less coal, gas and oil for heating, and started using biofuels instead. Sweden has reduced its greenhouse gas emissions by 25 per cent since 1995. Its carbon tax was a key contributor.
Key fact: Sweden wants to be carbon neutral by 2045 and will use pricing to help get there.
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The United Kingdom has had a bipartisan consensus on climate change for a long time. They introduced a carbon price in 2001 and gradually ramped it up over time.
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Tokyo was the first city to put a price on pollution back in 2010. About 1,300 of its largest buildings pay a price on carbon.
How it worked: Building operators started massive upgrades and retrofits. The most common initiatives were the installation of high-efficiency furnaces and lights.
Key fact: Over 70 per cent of buildings met their 2020 targets by 2013.
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Fighting climate change isn’t controversial in the EU. It has had a price on carbon for 15 years, fostered international co-operation and emphasized the need for collective action. The system applies to most of Europe’s large industrial facilities (manufacturing, power, etc.).
How it worked: It took a while to get working, but the EU’s system is finally humming along. It led to a direct increase in the number of low-carbon patents and innovations, and it’s slowly changing how the EU produces electricity.
Key fact: The EU’s carbon market is the largest in the world, but it will fall to No. 2 when China launches its carbon market in 2020.
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