Leaders pledge specific actions on carbon pricing

A panel of World Bank Group, including six heads of states and governments, yesterday agreed on an ambitious global target for putting a price on carbon pollution.

The Carbon Pricing Panel challenged the world to expand carbon pricing to cover 25 percent of global emissions by 2020 -- double the current level -- and to achieve 50 percent coverage within the next decade.

The panel also includes heads of the World Bank Group, International Monetary Fund, and Organisation for Economic Co-operation and Development (OECD).

The call, which comes on the eve of the signing ceremony in New York of the Paris COP21 Agreement today, was made, among others, by Prime Minister of Canada Justin Trudeau, President of Chile Michelle Bachelet, Prime Minister of Ethiopia Hailemariam Dessalegn, President of France François Hollande, Chancellor of Germany Angela Merkel, and President of Mexico Enrique Peña Nieto.

"There is a growing sense of inevitability about putting a price on carbon pollution," World Bank Group President Jim Yong Kim was quoted as saying in a statement received from IMF yesterday.

"In order to deliver on the promises of the historic Paris climate agreement, a price on carbon pollution will be essential to help cut emissions and drive investments into innovation and cleaner technologies. Prices for producing renewable energy are falling fast, and putting a price on carbon has the potential to make them even cheaper than fuels that pollute our planet," Kim said.

The call to expand carbon pricing was supported by United Nations Secretary-General Ban Ki-moon.

"Carbon pricing is an invaluable tool for redirecting investments and transforming markets to build low-carbon, climate-resilient economies that will drive prosperity, strengthen security and improve the health and well-being of billions of people," he said.

In a joint vision statement, the leaders declared that carbon pricing needs to be implemented faster and further on a global scale to hold the increase in the global average temperature to well below 2°C above pre-industrial levels, and drive efforts to keep the rise to no more than 1.5°C.

"Carbon pricing is the most effective policy for reducing emissions, raises significant revenues, is administratively straightforward, and can have substantial domestic health benefits," said IMF Managing Director Christine Lagarde.

In support of the global goals in the vision statement, Canada, Chile, Ethiopia, France, Germany, Mexico, California and Rio de Janeiro committed to taking specific actions to strengthen and expand carbon pricing mechanisms.

The call by the Carbon Pricing Panel complements the work of the Carbon Pricing Leadership Coalition, which brings together 24 countries and more than 90 global companies and strategic partners to push for an action on carbon pricing by collecting and sharing best practices and mobilising business support.

At present, some 40 countries and 23 cities, states and regions around the world are using carbon pricing schemes, representing about 7 billion tonnes of carbon dioxide.

The schemes, now worth about $50 billion, cover about 12 percent of global emissions, which is a threefold increase over the last decade.

The vision statement, which calls for that level to double by 2020 and double again within a decade, says it can be done in three ways: by increasing the number of governments putting a price on carbon, deepening existing carbon pricing programmes, and promoting global cooperation.