You might say: Well this proves that we can cut demand by pricing carbon.
Check the numbers. Before the recent increase Brent Crude was around $80 a barrel. Now it’s $120 a barrel. An increase of $40 a barrel. Say that’s a carbon tax. Burning a barrel of oil emits 0.43 metric tons of CO2 according to the EPA website. So it’s like the tax is about $100 a tonne CO2. That’s €70.
So now we know that €70/tonne just starts to take the edge off demand.
Today EUAs are around €16. We have a long way to go then. Noone is predicting prices of €70 anytime soon.
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