Merkel and Hollande among world leaders calling for global carbon price

A unique group of international heads of state, city leaders and international development banks has joined forces to call for an international price on carbon.

The alliance - known as the Carbon Pricing Panel - is convened by World Bank president Jim Yong Kim and IMF managing director Christine Lagarde

The alliance - known as the Carbon Pricing Panel - is convened by World Bank president Jim Yong Kim and IMF managing director Christine Lagarde

The alliance – known as the Carbon Pricing Panel – is convened by World Bank president Jim Yong Kim and IMF managing director Christine Lagarde, and includes German Chancellor Angela Merkel, French President François Hollande and California Governor Jerry Brown.

The group argues that a price on carbon is an effective way to decarbonize the global economy as it provides certainty and predictability to the private sector so they can make long-term investments in climate smart development.

World Bank Group President Jim Yong Kim said: “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.”

Momentum

Around the world, about 40 nations and 23 cities, states and regions have implemented or are putting a price on carbon with programs and mechanisms covering about 12 percent 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

Angela Merkel commented: “Low carbon technologies are an element in the fight against worldwide climate change. With a price for carbon and a global carbon market, we promote investment in these climate friendly technologies.

“Many governments are already putting a price on carbon as part of their climate protection strategies. We should advance our effort along this path further so that we can actually reach our goal of maintaining the two degree upper limit.”

The announcement was welcomed by Nicolette Bartlett from the Prince of Wales's Corporate Leaders’ Group, who said: “Business has been supportive of a carbon price for a long time. Clearly this is happening at a national and regional level at the moment and to create a level playing field, the ultimate aim should be for us to be able to realise a global carbon price in the future.

“We are not expecting that to come out of Paris. But what we do want is for the agreement to create the potential for this to be realised sooner rather than later.” 

Opposition

Calls for a carbon price have been picking up momentum in recent months, with companies like Mars, Veolia, Shell and BP all advocating for one.

However there is still some opposition from green groups. Greenpeace campaigner Charlie Kronick, said the mechanism was a “costly distraction from meaningful action on emissions” that buys companies “more time to continue business as usual”.

Brad Allen


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