According to a recent study entitled “Carbon pricing revenues could close infrastructure gaps” conducted by the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin, and published in the journal World Development, a carbon tax would generate sufficient funds to close the funding gap for desperately needed infrastructure to supply clean drinking water for all.
According to Dr. Michael Jakob, lead author of the study from MCC, “It’s possible to finance the drinking water supply in the majority of countries worldwide by the year 2030”
According to Jakob, the carbon tax in India alone would generate around US$ 115 billion per annum, which would not only be sufficient to supply clean water for all but as this would take a mere 4% of income generated, there would be sufficient left over to spend on improving sanitation and electricity infrastructure as well.
In countries where carbon emissions are very low, such as some in Sub-Saharan Africa, this would not work as a carbon tax would generate minimal revenue, but Jacob has a solution for this too, and said, “However, this funding gap could be closed when considering that developing countries have not yet exhausted their right to use the atmosphere. Avoidance of emissions would then entitle them to compensation payments from industrialized countries.”
Researchers assumed in their calculations that, as virtually every country is now introducing a steadily increasing carbon tax, the tax would have to be US$40 per tonne of CO emissions by 2020 and increase to US$175 per tonne by 2030.
Dr. Sabine Fuss, co-author of the study and a guest researcher at the International Institute for Applied Systems Analysis (IIASA) explained that in addition to generating revenue for water infrastructure, the carbon tax would contribute to the international goal of limiting global warming to two degrees because the tax penalises the use of fossil fuels and creates incentives for zero-carbon technologies, and any money that was not used for infrastructure could be utilised to assuage climate change impacts such as rising sea levels.
“Nobody wants to pay more. But that’s exactly why the idea to fund vital infrastructure directly from carbon revenue has clout. One thing is clear: For climate protection to be effective it must be embedded in a broader sustainable development scheme, and vice versa. Simply infusing more money won’t solve the problem. Instead, decisive factors such as a functioning state, democratic decision-making and the relevant institutions must be taken into consideration,” said Jakob.
Source: International Institute for Applied Systems Analysis
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