OECD calls for ‘coherent approach’ to carbon pricing

Releasing the report, Climate and carbon: Aligning prices and policies, OECD Secretary-General, Angel Gurria, said that a transformation of the global energy system is needed if countries hope to limit climate change to a 2ºC temperature increase, as agreed by the global community.

Gurria called for a coherent approach to carbon pricing, to ensure that price signals sent to consumers, producers and investors alike are consistent and facilitate the gradual phase-out of fossil fuel emissions.

He also questioned how much impact existing climate policies can have when countries around the world continue to subsidise the exploration, production and use of fossil fuels.

“Whatever policy mix we put in place, it has to lead to the complete elimination of emissions to the atmosphere from fossil fuels in the second half of the century,” said Gurria.

“We don’t need to see zero net emissions tomorrow, but we will need to be on the pathway,” he added.

The report says governments need to ensure that carbon pricing is sufficient to achieve climate goals and that other policies are well-aligned with these goals.

With international negotiations getting under way for a new climate agreement in 2015, every government needs to review its policy settings and rigorously assess if their overall impact helps climate action or hinders it.

Gurria stressed that “cherry-picking a few easy policy measures is not enough”.

“There has to be progress on every front, but notably with respect to carbon pricing, and we don’t have any time to waste. Unlike the financial crisis, we do not have a ‘climate bailout’ option up our sleeves,” he added.

Last month, Gurría called on governments to better manage water risk to avoid jeopardising economic growth and food and energy security.

“Instead of just reacting to water crises, governments must assess, target and manage water risks proactively,” he said.

Leigh Stringer