The debate over carbon pricing has shifted, with the focus moving from whether to have carbon pricing to how to put an effective price on carbon. The change comes in the face of scientific warnings, clear evidence of countries acting to spur low-carbon development, companies moving to develop business strategies for a carbon-constrained world, and a groundswell of interest in how to use economic policy and business planning to transition to low-carbon and resilient development.
In the run-up to the in September, the World Bank Group, together with other partners, is calling for countries and companies to get behind this effort and support a proposed statement that will demonstrate the global support and action toward pricing carbon that is necessary to tackle climate change.
“We are encouraging countries, sub-national jurisdictions, and companies to join a growing coalition of first movers to support putting a price on carbon,” said Rachel Kyte, World Bank Group vice president and special envoy for climate change. “A carbon price provides a necessary signal for investment in low-carbon and resilient growth and, regardless of the mechanism used, should be part of any package of policies to scale up mitigation.”
Kyte was speaking at a session on carbon pricing during the , a preparatory meeting for the UN Secretary-General’s Climate Summit, to be held in New York on Sept. 23. Together with senior representatives from China, Morocco, the European Commission, European Investment Bank, IKEA, the Carbon Disclosure Project and the International Emissions Trading Association, she drew attention to a proposed public statement that reflects a sense of urgency and inevitably for carbon pricing.
Public and private sector leaders are invited to support the proposed statement, which could be released at the UN Summit. In the statement, they agree to work together toward the long-term goal of a carbon price applied throughout the global economy by:
? Strengthening carbon pricing policies to redirect investment commensurate with the scale of the climate challenge;
? Bringing forward and strengthening the implementation of existing carbon pricing policies to better manage investment risks and opportunities; and
? Enhancing cooperation to share information, expertise and lessons learned on developing and implementing carbon pricing through various “readiness” platforms.
A carbon price can be achieved through markets or taxes, and different instruments will be appropriate in different countries for different sectors of the economy. Market-based mechanisms are likely to deliver large-scale emission reductions more efficiently and quickly.
The good news is that a growing number of countries, provinces, and cities are already designing carbon pricing solutions.
