Scientists call for revamped and increased carbon pricing
A group of climate scientists has called for a complete revamp of carbon pricing mechanisms in the build-up to COP26 to ensure that they actively reflect the scale of action required to respond to the climate crisis and enable businesses to deliver deep emissions cuts.
The Climate Crisis Advisory Group (CCAG) has set out seven key recommendations for global leaders to consider during negotiations at COP26. It is hoped the recommendations will make carbon pricing more effective.
Current data from the UN suggests that, based on NDCs, the world is on track for 3C of warming. Separate data from the Intergovernmental Panel on Climate Change (IPCC) also warns that emissions must have been reduced by at least 45% by 2030 compared to 2010 levels to put the world on course to alleviate the worst impacts of the climate crisis.
As such, the CCAG is calling for a revamp of carbon pricing policies and mechanisms.
As well as raising the price of carbon, CCAG also calls for greater sectoral coverage to enable businesses from all parts of the economy to consider deep mitigation actions. Geographical consideration of carbon pricing should also be considered and pricing should also look to cover all forms of greenhouse gas emissions.
Additionally, the CCAG calls for carbon price revenues to be redistributed equally to help vulnerable communities, while increased funding should also be made available from high-income countries to developing nations to help them strengthen policies.
The final call from scientists is for governments to be prepared for institutional changes in policy making to include systems thinking, learning and adaptation and knowledge-sharing across countries.
CCAG’s chair Sir David King said: “Carbon pricing schemes have had a positive and significant impact on emissions reductions so far, particularly when it comes to transitioning away from the use of coal and oil, as well as in some areas on clean energy innovation.
“A properly functioning carbon price covering a large number of countries would send clear signals across global supply chains and help address the distributional impacts of the energy transition. Without significant international fiscal policy revisions such as this, we will categorically lose our fight against climate change, where climate-related disasters become our only certainty.”
The recommendations were launched ahead of COP26, where global leaders will discuss carbon markets set out in Article 6 of the Paris Agreement.
According to the International Monetary Fund, the global average carbon price in 2020 was just $3 per tonne. Some nations, including Canada, have set out requirements for carbon pricing to rise exponentially in the coming years; some Canadian provinces have committed to CAN$170 per tonne in 2030, up from CAN$10 in 2018. But this remains the exception, rather than the norm.
Some green groups have already called for a “radical overhaul” of carbon pricing, in the aim of reaching a $147 minimum price per tonne by the early 2030s.
CCAG also proposes an alternative approach to carbon pricing – one which levies charges at the point of fossil fuel extraction, based on the amount of carbon formed in any process in which it would be used as fuel.
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