. Reducing carbon emissions from burning fossil fuels like coal, oil, and gas won’t happen without some prodding. Just as you might pick the cheaper of two similar items when shopping, people are less likely to choose fossil fuels with an added environmental cost if cleaner alternatives are cheaper. Pricing carbon is essentially calculating the cost of releasing another ton of carbon dioxide (CO ) into the air. The use of fossil fuels may create jobs and commerce right now, but they enjoy an implicit subsidy: users don’t have to pay for environmental damages. In economic
concentrations of GHGs, which are hard to reduce. Synergy Understanding the interplay among these three challenges is crucial: failing to meet any of them would be extremely costly. Some synergies are of particular importance. In the short and medium terms, pricing carbon, through a carbon market or taxation, can generate much-needed revenue and ease public deficits. Further, low-carbon-infrastructure investment during a global slowdown has the advantage of drawing on underused resources, reducing the risk of crowding out other important investments. In the longer