New York Times Editorial,
The price per metric ton of permits to spew carbon-dioxide into the atmosphere fell by $3.30 on the European Climate Exchange between the first day of the climate summit in Copenhagen and the day after its disappointing conclusion as traders reacted to the failure to reach binding targets for future carbon emissions.
The decline — which put the price of the benchmark futures contract dated December 2010 at $18.20 per ton — reflects the European market’s deflated expectations that the meetings would lead to a treaty to lower emissions ceilings and boost the price of permits.
The depressed price of the emissions permits also suggests that despite years of diplomatic efforts, the real world — where people and businesses buy energy to make things, move things and stay warm — still operates as if people can spew carbon more or less at will.
Consider how much carbon really costs.
After reviewing a series of independent studies, the Environmental Protection Agency concluded last year that the “social cost” of releasing one more ton of carbon-dioxide into the air, the cost of the environmental damage and other consequences over the next century, was between $40 and $68 in 2007 and would rise to up to $179 in 2040 if we don’t cut emissions soon.
A review of the economics of climate change by Nicholas Stern, a professor at London School of Economics, which was written at the behest of the British government in 2006, asserted that emissions should be priced initially at about $75 a ton to encourage investments in alternative energy sources and reduce the use of fossil fuels enough to avoid drastic climate change.