How high should the price of a tonne of CO2 be to have an impact?

It is very hard to put an accurate price on all the damage climate change causes. How do you put a price on the loss of biodiversity, ocean acidification, sea level rises, extreme weather, drought, famine, the spread of tropical diseases, political instability and other effects we didn't even yet think of?

Some economics work with 'abatement costs', the price at which investing in CO2 reduction becomes viable. These abatement costs differ greatly per industry sector

Prominent economists [1] involved in the 'High-Level Commission on Carbon Prices' calculated that we need a price between €40 and €80 per tonne of CO2 in 2030 to be in line with the Paris Agreement objectives. Other ecomists such as Kaufmann (2021) assessed the socil costs of carbon, and concluded a price of 70 to 110 euro is needed in 2030 to decarbonise by mid-century.

For the current price of one carbon credit, check the German trade platform EEX, which is designated by the European Commission to be the joint auction platform.

[1] Stiglitz en Stern


Emission trading