(Updates with EDF-IETA report)
A coalition of national, state, and city leaders, along with the heads of the World Bank, IMF, and OECD, on Thursday challenged the world to double its current carbon pricing coverage to 25% of global emissions by 2020.
The leaders, who along with the heads of some 150 countries are convening in New York this week to sign the Paris Agreement, have also called for half of all GHG emissions to be covered by carbon pricing schemes within the next decade.
The leaders, who form the Carbon Pricing Panel – a group convened by World Bank Group President Jim Yong Kim and IMF Managing Director Christine Lagarde, include the heads of Germany, France, Canada, Mexico, Chile, and Ethiopia, as well as California’s governor and Rio de Janeiro’s mayor.
“There is a growing sense of inevitability about putting a price on carbon pollution,” the World Bank’s Kim said, adding that such a measure was essential to helping cut emissions and drive investment into low-carbon technologies.
Currently, carbon pricing schemes in some 40 countries and 23 cities, states, and regions around the world cover around 7 billion tonnes of CO2e, representing around 12% of the global total.
The panel issued a ‘joint vision statement’, in which the leaders called for carbon pricing to be implemented faster and further in order to both keep in sight the Paris Agreement’s goal of holding global temperature rises below 2C above pre-industrial levels, and to drive efforts to cap the increases at 1.5C.
In the statement, the leaders also committed to take specific actions to strengthen and expand existing carbon pricing mechanisms.
“We will continue to work with our provincial and territorial partners to develop a more coordinated, pan-Canadian approach to climate change and carbon pricing,” said Canadian Prime Minister Justin Trudeau.
“Mexico is convinced that in order to stabilize the increase in global temperature … a fair and real carbon price must be set,” added Mexico’s President Enrique Pena Nieto.
“For this reason, my country has implemented different measures to promote a price on carbon, such as carbon taxing and clean energy certificates, which will allow us to launch a carbon national market by 2018.”
Chilean President Michelle Bachelet said her country would continue to collaborate with others on green growth and carbon markets, and foster private and public partnerships that link climate technologies and financing.
AMBITIOUS BUT ACHIEVABLE
Environmental Defense Fund (EDF) and the International Emissions Trading Association (IETA) said the targets are ambitious but achievable, and jointly published an analysis coinciding with the panel’s announcement looking at how they can be met.
They found the ‘25% in 2020’ target can be reached if existing and planned carbon pricing programmes are augmented, for example if China implements its proposed national ETS on the power sector, domestic aviation, and six industrial sub-sectors, and emissions from international aviation are covered under a global market-based measure.
The report said additional efforts must also be taken by large emitting nations. This can include:
- Carbon pricing policies extended to cover the entire US power sector and implemented or extended as planned in the Canadian provinces of Ontario, Manitoba, and Alberta, while current policies in British Columbia and Quebec are maintained;
- The EU nearly doubling the coverage of its ETS to include buildings, transport, and waste;
- China extending the coverage of its national ETS to include nearly all of its industrial sectors;
- A combination of major economies, such as Australia, Mexico, and Brazil, implementing new or expanded carbon pricing policies.
The report also outlined scenarios where the ‘50% by 2025’ target can be hit, most of which involve a number of big-emitting developing countries adopting carbon pricing policies to varying degrees.
“As the vision statement recognizes, to realize the full promise and potential of carbon pricing, we need to broaden it into new jurisdictions, deepen it where it already exists, and connect systems over time,” said EDF President Fred Krupp.
Efforts by the Carbon Pricing Panel complement the work of the World Bank-organised Carbon Pricing Leadership Coalition, which brings together 24 countries and almost 100 companies to provide support for efforts to develop and implement such initiatives.
By Mike Szabo – firstname.lastname@example.org