Carbon Tax to Solve Global Warming

According to a top US economist last Thursday that in order to fight global warming, carbon taxes and not cap and trade market alone will lead the technological changes the world's energy system needs.

Spending almost $65 billion a year for permits to emit greenhouse gasses, cap and trade has been the dominant choice to slow global warming. The European Union, under the Kyoto Protocol, even adopted the policies as well as other US companies who volunteered for the program which by the way, are the major carbon polluters.

Jeffrey Sachs - a special advisor to the U.N. Secretary General and director of the Earth Institute at Columbia University - told a panel last Thursday that it is much more cheaper and simpler to put carbon tax on energy production rather than  putting a cap on tens and thousands of polluters. This carbon tax will somehow focus at an oil wellhead or refinery. 

As the world prepares to form  a successor agreement for the Kyoto Protocol by the end of next year, focus is sharpening on how well is the cap and trade markets are fighting emissions. Carbon taxes will quickly cut emissions across all sectors of the economy, including vehicles and manufacturing, said Sachs. It could be more efficient than spreading the trade of permits across the financial system.