Pricing carbon

‘There has never been a global movement to put a price on carbon at this level and with this degree of unison’

Katie Hill - Editor-in-Chief, My Green Pod

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Published: 27 October 2015

This Article was Written by: Katie Hill - My Green Pod

  

For the first time – and with the support of heads of leading companies – an alliance of heads of state and city and state leaders have joined forces to urge countries and companies around the globe to put a price on carbon.

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The Carbon Pricing Panel

The call to price carbon comes from the Carbon Pricing Panel – a group convened by World Bank Group President Jim Yong Kim and IMF Managing Director Christine Lagarde – to spur further, faster action ahead of the Paris climate talks.

The panel includes German Chancellor Angela Merkel, Chilean President Michelle Bachelet, French President François Hollande, Ethiopian Prime Minister Hailemariam Desalegn, Philippines President Benigno Aquino III, Mexican President Enrique Peña Nieto, Governor Jerry Brown of California and Mayor Eduardo Paes of Rio de Janeiro.

‘There has never been a global movement to put a price on carbon at this level and with this degree of unison. It marks a turning point from the debate on the economic systems needed for low carbon growth to the implementation of policies and pricing mechanisms to deliver jobs, clean growth and prosperity.

‘The science is clear, the economics compelling and we now see political leadership emerging to take green investment to scale at a speed commensurate with the climate challenge.’

Jim Yong Kim, World Bank Group President

Private sector support

These global leaders are calling on their peers to join them in pricing carbon to steer the global economy towards a low-carbon, productive, competitive future – without dangerous levels of carbon pollution.

Through strong public policy they are helping to convince the private sector to make long-term investments in climate smart development.

Private sector support comes from US Institutional Investor CalPERS, ENGIE of France, Mahindra Group of India and Netherlands-based Royal DSM, who will help link business needs with public policies through the Carbon Pricing Leadership Coalition, an action-based platform that will launch in Paris on November 30, 2015.

‘If we really want to send market signals to enable enterprises to make their decisions under optimal economic conditions, which may be optimal ecological conditions, then the issue of carbon prices inevitably arises as it is the most tangible signal that can be sent to all economic actors.

‘I am aware of the fears created by this notion of carbon pricing, particularly among the most carbon- intensive industries, which have concerns, and rightly so, over their competitiveness. We must therefore act with resolve. Countries, big countries such as China, are already setting carbon prices. Europe already has a carbon market.’

French President François Hollande

A $50bn market

Around the world, about 40 nations and 23 cities, states and regions have implemented or are putting a price on carbon, with programmes and mechanisms that cover about 12% of global greenhouse gas emissions.

The number of implemented or scheduled carbon pricing instruments has nearly doubled since 2012, reaching an aggregate market value of about $50 billion.

‘Climate change is real. It threatens food and water security, and contributes to the occurrence of more frequent and more destructive storms. In our part of the world, whole South East Asian coastal communities are at a particular risk. They need to be relocated, given the threats of storm surges, rising sea levels, and even landslides.

‘Years of international research show that global greenhouse gas emissions are intensifying, consequently contributing to the factors that leave so many at risk. In this vein, developing a price on carbon sets in motion the shift towards cleaner investments for our peoples. The Philippines thus believes that this is a step we must all take part in, lest we collectively suffer the consequences of inaction.’

Philippines President Benigno S. AQUINO III

Click here to find out more about the Carbon Pricing Leadership Coalition. A report on the state and trends of carbon pricing can be found here.

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