Last week's edition of The Economist had a long article at pages 57-60 (link above) about how the financial sector is helping to reduce climate change. An interesting part of that article concerns the fact that some Central Banks are forcing banks and insurers to stress tests that must model a 4ºC world or a 100 USD/tonne carbon price in order to discover how badly are those banks lending to polluter firms.
But why a 100 USD/tonne carbon price ? Is it because of this ?
But what about the carbon prices in the paper authored by a researcher of University of Massachusetts Amherst:
“The ‘welfare-optimizing’ SCC rises from $37/mt CO2 in 2020 to about $100 in 2050. The temperature increase in this optimal trajectory would be 3.5 °C by the turn of the century, and rising thereafter.23 The price required to achieve the 2.5 °C maximum starts more than six times higher at about $230/mt CO2 in 2020, rising to about $1000 in 2050. The gap between these trajectories would be even wider if the temperature constraint was the 1.5–2 °C Paris target” https://www.sciencedirect.com/science/article/pii/S092180091731580X#bb0275