Global Carbon Pricing: The Path to Climate Cooperation ed. Peter Cramtonetal (review)

The editors of Global Carbon Pricing argue that only "a reciprocal, common climate commitment" (p. xiii) will overcome the failure of the Paris Agreement's "pledge-and-review" approach and make the global climate goal attainable. They suggest that we need to change the game and focus on global carbon pricing to facilitate cooperation. Climate change is a classic tragedy of the commons, where self-interested actors are unwilling to cooperate because they believe others will also fail to cooperate. The editors are confident that a reciprocal common commitment can be agreed if a global carbon price is established, and that under the resulting cooperation "national self-interests will realign with the public good" (p. xiii).

Global carbon pricing has been widely debated in scholarly work on global environmental governance, and this book adds to a chorus of economists promoting market-based approaches to solve environmental problems. What is novel is that global carbon pricing, as framed here, will foster common, not individual, commitments in climate negotiations. Countries agree upon a global price and levy charges against the use of fossil fuels however they see fit, as long as the national average reaches the global price. Revenues generated are kept in each country, and a portion of charges levied are collected in a common pot to be distributed to less developed countries to offset the cost of mitigation and adaptation measures.

The book draws on and contributes to the literature on climate policy and climate economics. The twelve essays are divided into two sections: first, the gap between what is needed to mitigate climate change and what individual countries are currently willing to do is introduced, along with the concept of climate cooperation. The second section begins with an explanation of global carbon pricing and how it builds trust and reciprocity, is flexible enough to cost less, and fosters cooperation and reciprocal commitment). Often, carbon pricing is justified by pointing to flaws in the Kyoto Protocol and Paris Agreement, such as the lack of penalties or sanctions. The final chapters focus on the importance of setting minimum carbon prices and deal with issues of climate justice and fairness. The final chapter further explains why the current "pledge-and-review" approach is doomed to fail.

Determining a global carbon price, and attaining a common commitment to one, are lofty ambitions, which some authors openly acknowledge as limitations of this alternate model. Of concern, however, are some missing (and familiar) issues. The question of whether carbon pricing as a major mitigation instrument can be compatible (and politically feasible) with common but differentiated responsibilities, especially in less developed countries, is not sufficiently addressed. The establishment of a "Green Fund formula" designed "to please all of those whose support is needed" (p. 235) is not adequately explained in terms of how it would work in practice; would it finance offsetting programs, similar to REDD+, or would it focus on investing in hard or soft technologies for, say, carbon removal? How much would each country contribute and who would regulate the process? Where along the value chain would costs be considered?

Although some authors are confident that economic incentives will overcome the free-rider problem because countries will "take charge of their climate commitments rather than engage in carbon freeriding" (p. 213), explaining how the failure to attain legally binding commitments in previous agreements will be solved at the negotiating table for carbon pricing (and who will be present) is overlooked. The book does an excellent job of criticizing Kyoto (and Paris), instead of, for instance, explaining how a "universal price signal to reduce the consumption of fossil fuels" (p. 97) will be stronger than existing schemes, or how the authors will deal with contradictory policies such as fossil fuel subsidies.

For readers not well versed in ongoing debates about global environmental governance and climate economics, some chapters are difficult to follow. In a volume that characterizes the failure of...