World, state leaders unite in calling for a price on carbon

Published 20:01 on October 19, 2015  /  Last updated at 21:03 on October 19, 2015  /  Climate Talks, International, New Market Mechanisms  /  No Comments

An alliance of heads of state, city and state leaders from rich and poor nations, with the support of an assortment of large companies, have joined forces to urge countries and companies around the globe to put a price on carbon.

An alliance of heads of state, city and state leaders from rich and poor nations, with the support of an assortment of large companies, have joined forces to urge countries and companies around the globe to put a price on carbon.

The call to price carbon comes from the Carbon Pricing Panel – a group convened by World Bank chief Jim Yong Kim and the IMF head Christine Lagarde – to spur faster, more ambitious action ahead of the Paris climate talks.

The panel also includes German Chancellor Angela Merkel, Chilean President Michelle Bachelet, French President Francois Hollande, Ethiopian Prime Minister Hailemariam Desalegn, Philippines President Benigno Aquino III, Mexican President Enrique Pena Nieto, Governor Jerry Brown of California, Mayor Eduardo Paes of Rio de Janeiro and OECD Secretary General Angel Gurria.

These global leaders are calling on their peers to join them in pricing carbon to steer the global economy towards a cleaner, productive and competitive future without the dangerous levels of carbon pollution driving warming, they said in a joint statement.

“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,” said the World Bank’s Jim Yong Kim in a statement.

The call is a year on from when 73 countries and 11 sub-national jurisdictions responsible for over half of global emissions and GDP joined with business to sign a declaration in support of carbon pricing.

The World Bank’s climate envoy Rachel Kyte told journalists on a conference call on Monday that momentum towards carbon pricing had grown further since last year, with 80 nations referencing carbon pricing in their INDCs – far more than the 40 national and 23 sub-national examples being implemented currently.

She said that while carbon pricing was being implemented largely independently of the UN negotiations, the bank sees it as an inevitable step for countries to tackle climate change inexpensively, and has recently published guidance to help them implement policies.

Private sector support comes from US Institutional Investor CalPERS, French utility Engie, Indian industrial conglomerate Mahindra Group, and Netherlands-based pharmaceutical firm Royal DSM.

These companies aim to help link business needs with public policies through the Carbon Pricing Leadership Coalition, a platform due to launch in Paris on Nov. 30.

QUOTES

Heads of state

German Chancellor Angela Merkel:

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.

Chilean President Michelle Bachelet:

In Chile we believe in the polluter pays principle. We have enacted environmental taxes on our transportation and power sector. Both taxes will be instrumental in cleaner power, and more efficient cars, which will make our air cleaner, and our climate safer. And the revenue goes to fund our educational reform.

French President François Hollande:

If we really want to send market signals to enable enterprises to make their decisions under optimal economic conditions, which may be optimal ecological conditions, then the issue of carbon prices inevitably arises as it is the most tangible signal that can be sent to all economic actors. I am aware of the fears created by this notion of carbon pricing, particularly among the most carbon- intensive industries, which have concerns, and rightly so, over their competitiveness. We must therefore act with resolve. Countries, big countries such as China, are already setting carbon prices. Europe already has a carbon market.”

Ethiopian Prime Minister Hailemariam Desalegn:

Like many nations, Ethiopia has much to gain from early action on climate change – and much to lose if we collectively fail to act. We are rapidly developing a diverse portfolio of renewable energy resources, have been generating results from large scale programs to rehabilitate landscapes for increased agricultural productivity, resilience and carbon storage, and have shown the world that carbon funds can be put to productive use cutting emissions by regenerating forest cover, and improving people’s lives and livelihoods. A carbon price can be a win-win, not just for nations like Ethiopia, but for the entire planet provided that it is coordinated and its incidence does not unduly fall on the poor.”

Philippines President Benigno S. Aquino III:

“Climate change is real. It threatens food and water security, and contributes to the occurrence of more frequent and more destructive storms. In our part of the world, whole South East Asian coastal communities are at a particular risk. They need to be relocated, given the threats of storm surges, rising sea levels, and even landslides. In our own country, we are indeed hard pressed to build back better our vulnerable communities, to support their way of life, and to provide safer, more sustainable livelihood. We are deeply sympathetic about the plight of island nations, particularly Kiribati and Tuvalu, which are likewise in danger due to worsening environmental conditions. Years of international research show that global greenhouse gas emissions are intensifying, consequently contributing to the factors that leave so many at risk. In this vein, developing a price on carbon sets in motion the shift towards cleaner investments for our peoples. The Philippines thus believes that this is a step we must all take part in, lest we collectively suffer the consequences of inaction,”

Mexican President Enrique Peña Nieto:

The challenge of climate change compels us to rethink and transform the way we produce and consume. The international community must advance towards a low-carbon economy, by setting a price on carbon. In keeping with this goal, Mexico has strengthened its national policy towards green growth. Among other measures, we have established a fossil fuel tax which will foster clean technologies. This way we support international efforts in order to ensure that binding agreements –for both developed and developing countries– will be concluded at the upcoming COP 21, scheduled to be held in Paris,”

Sub-national leaders

California Governor Jerry Brown:

We can’t stand idly by as billions of tons of carbon pollution spew into the atmosphere.California has put a price on carbon, but these efforts mean little unless the world’s government and business leaders join us – and go even further.

Rio de Janeiro, Brasil Mayor Eduardo Paes:

Rio de Janeiro, like most of Brazil, is already experiencing the impacts of climate change – and we’re already taking action,” “We’re investing heavily in climate-resilient infrastructure, and we’re also committed to slashing carbon emissions across our economy. Putting a price on carbon will serve to accelerate our efforts to build low-carbon urban prosperity – not just in Rio, but in fast-growing cities around the world.

Multilateral institution leaders

World Bank Group President Jim Yong Kim:

“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.”

Christine Lagarde, IMF managing director:

“Finance ministers need to think about reforms to fiscal systems in order to raise more revenue from taxes on carbon-intensive fuels and less revenue from other taxes that are detrimental to economic performance, such as taxes on labor and capital. They need to evaluate the carbon tax rates that will help them meet their mitigation pledges for Paris and accompanying measures to help low-income households vulnerable to higher energy prices,”

Angel Gurría, secretary-general of the OECD:

“Putting a price on carbon is key for ensuring we have credible, cost-effective action on climate mitigation that will get the world on the road to a zero net emissions future.While COP21 will be important to set the overall framework for the path forward, it is domestic policies such as carbon pricing that will guide us collectively to that future. This Panel will help to provide the high level leadership that we need to generate greater momentum on carbon pricing up to and beyond COP21. The OECD is pleased to be engaged in the Panel and to work with the leaders and partner international organisations to expand the reach and uptake of carbon pricing. With so much positive upside to action, why would we not embrace the transition?”

Private sector leaders

Anne Stausboll, CEO of CalPERS:

“CalPERS supports a price on carbon because we are a financial institution grounded in economics and focused on the long-term. The market needs a transparent and consistent price that discourages carbon emissions, and stimulates low carbon investment opportunities. The goal is that pricing will catalyze a transition to a lower carbon economy.”

Gérard Mestrallet, CEO of ENGIE:

“Energy use is the main source of greenhouse gas emissions. Energy transition, key to keeping to a 2°C rise in temperature on the planet, has started, and ENGIE wants to lead. In addition to the 2 main pillars of its transition strategy – scaling up renewable and energy efficiency solutions and services Worldwide -, ENGIE has decided to stop developing any new coal generation project (that has not already been legally engaged). ENGIE has put a price on carbon to drive its investment decisions: generalizing carbon pricing is crucial to drive and boost low carbon energy transition everywhere and preserve the planet,”

Anand Mahindra, chairman and managing director of Mahindra Group of India:

Growth and sustainability are complementary and not conflicting goals, both are necessary to achieve a reasonable quality of life for all. Emerging countries will need to leverage technology to follow a low carbon growth path while developed nations will need to reduce their carbon footprint,”

Feike Sijbesma, chairman and CEO of Royal DSM:

We need to prevent a global temperature rise above 2C. A meaningful carbon price will provide an economic incentive to shift from fossil to (bio-) renewable energy and reduce GHG emissions. DSM enables a low carbon economy by, for example, increasing solar panel yields and converting crop residue into advanced biofuels. To help us take the right decisions from both an economic and environmental perspective, we use an internal carbon price of €50. Business has a responsibility to take care of the world for next generations.

By Ben Garside – ben@carbon-pulse.com

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