Carbon is an element that is often the target of environmental action when it comes to pollution. Too much carbon in the atmosphere is thought by some to be the cause of global climate changes that include fluctuating temperatures and lower air quality. The effects of changes to the global climate can be somewhat difficult to measure, but regionally and locally, these effects are a bit easier to track.

Putting a Price on the Effects of Carbon

Assuming that carbon is to blame for climate change, many believe that a cost needs to be affixed to the damage caused by carbon output. To do this, carbon pricing is used. To price carbon as it relates to damage, various regional and local effects are measured. The damage is then added up to arrive at a cost that is subsequently compared to the level of carbon output in a given area.

What’s the Point of Pricing Carbon?

The reason for assigning a price to carbon output is to hold producers accountable. Climate activists want to see carbon producers pay for the damages that are believed to be caused by carbon output, and by pricing carbon, a dollar amount can be assessed across different industries using regional metrics.

While this system works in theory, it doesn’t take into account each producer’s share of the effect carbon is having on a specific region. Instead, it assigns a blanket price based on the damages assessed and the carbon produced. In the end, there is no direct correlation between a producer’s exact output and the exact damages experienced by each affected party.

How Does the Process of Pricing Carbon Affect the Future?

The climate change debate and adjacent pricing system have caused some contention among detractors of pricing carbon. Some believe that this is not the right way to go about assessing financial punishment or compensation for carbon damage.

Some areas have already enacted regulations to uphold pricing schemes, and efforts have been attempted in the past to mandate such a system federally. Currently, however, there is no federal law mandating the pricing of carbon, but many federal environmental regulations do exist.

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Emily Clarke is providing info about a single platform for your oil and gas software solutions. You can find her thoughts at gas-oil software blog.