Joseph E. Stiglitz, 2001 Nobel Laureate and Professor in Economics at Columbia University, concludes that world leaders at the Copenhagen climate conference failed not only to reach a binding agreement, but also to agree on how to save the planet. An entirely new strategy is needed, he says, to effectively address climate change:

“Perhaps it is time to try another approach: a commitment by each country to raise the price of emissions (whether through a carbon tax or emissions caps) to an agreed level, say, $80 per ton. Countries could use the revenues as an alternative to other taxes – it makes much more sense to tax bad things than good things. Developed countries could use some of the revenues generated to fulfill their obligations to help the developing countries in terms of adaptation and to compensate them for maintaining forests, which provide a global public good through carbon sequestration.

We have seen that goodwill alone can get us only so far. We must now conjoin self-interest with good intentions, especially because leaders in some countries (particularly the United States) seem afraid of competition from emerging markets even without any advantage they might receive from not having to pay for carbon emissions . A system of border taxes – imposed on imports from countries where firms do not have to pay appropriately for carbon emissions – would level the playing field and provide economic and political incentives for countries to adopt a carbon tax or emission caps. That, in turn, would provide economic incentives for firms to reduce their emissions.”

This is an interesting idea, as it essentially shifts the focus away from getting each country to meet hard emissions reduction targets to setting the price of carbon, a simpler proposition from an economic point of view. Agreeing to hard caps can be politically contentious. Stiglitz’ approach might be more viable.

“This is the day that will define our century. Canada is fully acknowledging its historical climate debt and the legal responsibilities that follow. Today, we no longer have to wait for a COP20 or COP100 before the voices of our children are heard. Now that we are friends, I can say it is high time Canada changed.”

- Margaret Matembe, MP and member of the Climate Committee of Uganda

Too bad “the staged response” was in response to the fake news release claiming that Canada had done an about turnaround on its carbon emissions targets.

The hoax has created such a stir that PMO spokesman Dimitri Soudas apparently accused eco-warrior Steven Guilbeault of being its author. François Cardinal reports that Guilbault caught up to Soudas and the two exchanged some unkind words for one another. Suffice to say that the Feds in Copenhagen are getting some pretty bad press.

So far, it seems the Yes Men are getting credit for the prank.

Martin Wolf of the Financial Times offers three criteria for post-Copenhagen climate change policies to be truly effective.

First, we need prices for carbon that apply over relevant planning horizons. That price cannot be fixed forever, but must change with events. But it needs to be far more stable than in the European Union’s market for permits (see chart). A tax seems more attractive to me than “cap and trade”, for this reason.

Second, where the abatement occurs must be separated from who pays for it. Abatement needs to happen where it is most efficient. That is why emissions of developing countries must be included. But the cost should fall on the wealthy. This is as much because they can afford it as because they produced the bulk of past emissions.

Finally, we need to develop and apply innovations in all relevant technologies. A paper from the Bruegel think-tank argues, persuasively, that merely raising prices on carbon emissions would reinforce the position of established technologies. We need large-scale subsidies for innovation as well.

With Carbon Caps on the horizon in North America, new and established companies are scrambling to build carbon calculators. Over 50 have started up in the US this past year, and we will likely see more.

From the goliath at SAP to start-ups like ourselves, carbon calculators may become standard issue in companies trying to cut their footprint. The question remains, how the various software companies will integrate with a legal system that is likely to vary between jurisdiction and industry? From personal experience, calculating, certifying, and auditing carbon calculations is a nightmare and I am very unsure how software will solve the issue.

The governments who plan to regulate carbon emissions should put out calculation frameworks that allow for software developers to build on. If each company builds their own calculations, auditing and comparison between carbon emitters will be a nightmare.

A good point was made below on the need for more humility — nuance even — in the debate on how to deal with the increase in greenhouse gases. What’s also needed is good reporting. There might be evidence of an increase in plant growth, but what does that really mean? Are they toxic algae, possibly responsible for depleting the sea of its oxygen and killing ocean life? The booming biosphere argument also fails to address other worrying threats, such as the acidification of the sea. There’s much about this complex ecosystem that we don’t understand, as the Economist argues in its comprehensive special report on the sea. We must learn much more about it. In the meantime our ignorance should not stop from taking preventative or corrective measures.

Below, John Grimond, the author of the report, discusses some of the threats to the sea :