How do you implement carbon pricing?
Sustainable Investing
(Private)-Retroactive Carbon Pricing [(P)ReCaP] Review.
The paper by Yoshua Bengio and Prateek Gupta titled (Private)-Retroactive Carbon Pricing [(P)ReCaP]: A Market-based Approach for Climate Finance and Risk Assessment proposes a new policy tool for addressing climate change and promoting climate finance. The paper provides a comprehensive overview of the (P)ReCaP policy, including its design, rationale, and potential applications.
The (P)ReCaP policy is a market-based approach that seeks to impose a price on carbon emissions retroactively. This means that companies would be charged for the carbon emissions they have already released into the atmosphere, rather than just their current or future emissions (Bengio et al., 2022). The revenue generated by the policy could be used to fund climate finance initiatives, such as renewable energy projects, or returned to citizens in the form of a dividend.
The paper discusses the potential benefits of the (P)ReCaP policy.
Including its ability to generate revenue for climate finance, its potential to incentivize companies to reduce their carbon emissions, and its compatibility with existing carbon pricing policies (Bengio et al., 2022). In addition, the paper also acknowledges some potential drawbacks of the policy. Such as the challenges associated with measuring past emissions and the potential for political opposition to the policy.
Furthermore, the paper by Yoshua Bengio and Prateek Gupta titled (Private)-Retroactive Carbon Pricing [(P)ReCaP]: A Market-based Approach for Climate Finance and Risk Assessment has several strengths, including innovative policy proposal, comprehensive overview, evidence-based analysis, and clear writing. The (P)ReCaP policy proposed in the paper is an innovative and potentially effective tool for addressing climate change and promoting climate finance. The retroactive pricing of carbon emissions is a novel approach that could incentivize companies to reduce their carbon footprint and generate revenue for climate finance initiatives.
The paper also provides a detailed and comprehensive overview of the (P)ReCaP policy.
Including its design, rationale, and potential applications. The authors also discuss the potential benefits and drawbacks of the policy, as well as its compatibility with existing carbon pricing policies.
Moreover, the authors support their argument for the (P)ReCaP policy with evidence and analysis, including case studies and simulations. This provides readers with a clear understanding of the potential impact of the policy on emissions reduction and climate finance. A good example is the figure below of the schematic representation of the Private ReCaP (Bengio et al., 2022);
Lastly, the paper is well-written and accessible.
As a result, making it easy for readers to understand the complex policy proposal and its potential implications. Especially those readers who do not have an academic background.
While the paper by Yoshua Bengio and Prateek Gupta titled (Private)-Retroactive Carbon Pricing [(P)ReCaP]: A Market-based Approach for Climate Finance and Risk Assessment has several strengths, it also has some significant gaps.
The paper has limited discussion of implementation challenges. While the authors acknowledge that implementing the (P)ReCaP policy would present several challenges, such as measuring past emissions, the paper does not provide a detailed discussion of these challenges or potential solutions. Insufficient analysis of political feasibility is another gap that can be found in the paper. The paper does not provide a detailed analysis of the political feasibility of implementing the (P)ReCaP policy. Moreover, including the potential for opposition from industries or policymakers.
The paper also lacks exploration of the policy’s impact on equity.
The authors briefly touch upon the potential impact of the (P)ReCaP policy on equity. However, do not provide a detailed analysis of how the policy could affect different socioeconomic groups. In addition to that, the paper has limited comparison with other carbon pricing policies. While the authors discuss the compatibility of the (P)ReCaP policy with existing carbon pricing policies, the paper does not provide a detailed comparison of the (P)ReCaP policy with other carbon pricing policies, such as cap-and-trade or carbon taxes.
The paper by Yoshua Bengio and Prateek Gupta titled (Private)-Retroactive Carbon Pricing [(P)ReCaP]: A Market-based Approach for Climate Finance and Risk Assessment proposes an innovative policy tool for addressing climate change and promoting climate finance. The (P)ReCaP policy, which seeks to impose a price on carbon emissions retroactively; could generate revenue for climate finance initiatives and incentivize companies to reduce their carbon emissions.
The paper provides a comprehensive overview of the (P)ReCaP policy.
Including its design, potential benefits and drawbacks, and compatibility with existing carbon pricing policies.
The authors support their argument with evidence and analysis. Making the paper a valuable contribution to the literature on climate policy and finance.
However, the paper also has some serious gaps!
Including a limited discussion of implementation challenges. Furthermore, insufficient analysis of political feasibility. In addition, alack of exploration of the policy’s impact on equity. And lastly limited comparison with other carbon pricing policies. These gaps suggest that further research is needed to fully understand the potential of the (P)ReCaP policy.
Overall, the paper presents an innovative and promising approach to addressing climate change and promoting climate finance. However, its potential impact and feasibility needs to become further explored and understood to assess its effectiveness as a policy tool.
Read the full paper:
(Private)-Retroactive Carbon Pricing [(P)Recap]:
A Market-Based Approach for Climate Finance and Risk Assessment
References
Bengio, Y., Gupta, P., Radovic, D., Scholl, M., Williams, A., de Witt, C. S., … & Zhang, Y. (2022). (Private)-Retroactive Carbon Pricing [(P) ReCaP]: A Market-based Approach for Climate Finance and Risk Assessment. arXiv preprint arXiv:2205.00666.
How do you implement carbon pricing?
