The collapse of the carbon market

In economic terms a carbon tax is clearly the most effective and simplest way of encouraging the shift to a low carbon economy. Of course the level of the tax matters. Stephen Tindale, in an excellent paper for the CER, suggests a floor price of 30 euros a tonne. I am not convinced this is enough to force people to shift given all the costs of making the change but it is certainly more effective than a price of 3 euros. Unfortunately Tindale’s proposals have little chance of success. German politics in particular seem to be working against any rational solution.