Covid-19 brought the world to a halt. During this period where economic activity was largely suspended, worldwide reflections began about how to better the course of our future. As global levels of carbon dioxide emissions declined, the need for a sustainable economy has become clearer than ever.
The Green Deal of the European Commission, put forth on December 11, 2019, has set forth a number of concrete and important actions that need to be taken in order to achieve European net-zero carbon emissions before 2050. The only caveat: this plan was drawn before the Covid-19 crisis.
Did our fight against climate change take into account a global economic recession? No, clearly. But does saving our economy mean we have to forego our planet? Absolutely not.
The fact of the matter is that global economic activity was turned on its head over the course of just a few months. The economic recession we are facing leaves us with little choice but to find the best possible use of public money. The opportunity, thus, presents itself to pave the way for a recovery plan that is both economically viable and environmentally sustainable. Taking the current context into account, this policy paper argues that the sure path towards this dual objective is through one particular component of the Green Deal: carbon pricing.
European countries are among the most likely to reach the objectives set by the Paris Agreement: EU members have almost all (with the exception of Poland) renewed their goal of carbon neutrality by 2050. A 23% decrease in emissions since the 1990s goes to show that results can be achieved when States follow through and take action. However, at this stage, the 2050 objective is still out of reach, and much still needs to be done.
This policy paper aims to look into how the European Union could lead the world towards decarbonization, by relying on the mechanism of carbon pricing. The aim would be to ensure an integral and decentralized redistribution of the carbon dividend. The green transition can sustain the economy while at the same being equitable.