France has confirmed it will introduce a floor price for carbon emissions from coal power stations, which will increase from around Euro20 in 2020 to Euro 50 in 2030. EurActiv’s partner Journal de l’Environnement reports.
“A significant tax on carbon emissions is one of the most appropriate and effective responses [to the threat posed by climate change], and while it is clear that the whole world will have to accept this decision in order to completely ward off this danger, it is also clear that France has a duty to lead, anticipate and educate.”
This quote from France’s former prime minister Michel Rocard was included in a report on carbon pricing submitted to Ségolène Royal, the French minister for ecology, on Monday (11 July).
Carbon pricing
Coordinated by the former minister for development, Pascal Canfin (now director of WWF France), the former leader of the national debate on the energy transition, Alain Grandjean and the former CEO of energy company Engie, Gérard Mestrallet, the document summarises the French position on carbon pricing. The priorities had been sketched out a month ago at a forum in Paris.
In Europe, “the current workings and planned reforms of the European cabon market are not compatible with the Paris Agreement”, Canfin said. “And the only chance to preserve the integrity of the common climate policy is to open a carbon price corridor.”
The carbon price must provide a sufficient incentive for heavy industries to reduce their greenhouse gas (GHG) emissions. It must also rise progressively without becoming impossibly high. The three authors recommend the establishment of what economists call a floor price and a ceiling price for European GHG emissions quotas.
From Euro20 to Euro100 per tonne
For the authors, the price floor should be fixed at Euro 20-30 and the ceiling at around Euro 50 in 2020. It would then increase by between 5% and 10% each year to form a floor of Euro 50 and a ceiling of Euro 100 in 2030, according to Mestrallet.
This is a recipe they hope will please everyone. “At Euro20 per tonne, the revenue from the auction of quotas would reach at least Euro1 billion in 2020, compared to Euro315 million in 2015. This would be enough to finance the energy transition,” said Royal.
The idea is tempting, but the argument is far from over in Europe. Paris is preparing an initiative to try and turn the situation around. Firstly, by asking MEPs to amend the text of the Paris Agreement to increase its ambition. Secondly, Ségolène Royal will urge the president of the World Bank to launch a high level initiative to fix an appropriate carbon price at an international level.
And finally, by the end of the month the French government will set a carbon floor price for the country’s coal-fired power stations. This will be included in the 2017 draft budget.