Carbon Charges Add Little to What Consumers Pay: Commission

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Adding a green cost pricing premium to what consumers pay for products based on the amount of carbon emissions their production generates would increase prices only negligibly, according to an international think tank focused on economic growth and climate change mitigation.

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For instance, the Energy Transitions Commission noted, including an emissions cost for a pair of jeans made in Bangladesh would add just 40 pence (US 50 cents) to its selling price in the United Kingdom.

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“Carbon pricing is essential to overcome the green cost premium (the elevated costs of low or zero emission fuels), and it could drive cost-efficient decarbonization at a trivial cost to consumers,” wrote Adair Turner, chairman of the commission.

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Turner said the second-best solution to mitigate carbon costs would be for individual companies to impose domestic carbon prices combined with border carbon tariffs. Many believe that if consumers must pay extra for carbon-intensive goods and services, they would be prompted to reduce demand or switch to less carbon-intensive alternatives.

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