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World leaders moving to price carbon emissions

carbon-emissionsAhead of the November 2015 Climate Change Conference in Paris, a global Carbon Pricing Panel has been convened by World Bank President Jim Yong Kim and the International Monetary Fund’s Managing Director, Christine Lagarde to push for pricing of carbon emissions.

The panel’s formation is intended to push the social and environmental costs of carbon emissions to polluters, and implicitly compel states and corporations to invest in clean energy. The idea for the panel came from the UN climate summit in September 2014, where 74 countries and over 1,000 companies gave support for carbon pricing. 

With support from Angel Gurria, the Secretary General of the Organization for Economic Co-operation and Development (OECD), the convened panel includes French President François Hollande, German Chancellor Angela Merkel, Chilean President Michelle Bachelet, Ethiopian Prime Minister Hailemariam Desalegn, Philippines President Benigno Aquino III, Mexican President Enrique Peña Nieto, California Governor Jerry Brown, and Mayor Eduardo Paes of Rio de Janeiro.

A statement issued by the IMF says that “these global leaders are calling on their peers to join them in pricing carbon to steer the global economy towards a low-carbon, productive, competitive future without the dangerous levels of carbon pollution driving warming.”

The IMF’s Managing Director, Christine Lagarde said that finance ministers need to turn their attention to taxation of carbon emissions and away from taxes that are detrimental to economic performance such as those on labour and capital.

According to the IMF, about 40 nations and 23 cities, states and regions across the world have implemented or are putting a price on carbon with programmes and mechanisms covering about 12 percent of global greenhouse gas emissions.

The World Bank President, Dr Jim Yong Kim noted that there has never been a global movement with such scale and unison to put a price on carbon.

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,” he said.

The Carbon Pricing Panel is also supported by some private companies: the US Institutional Investor CalPERS, ENGIE of France, Mahindra Group of India, and Netherlands-based Royal DSM.

By Emmanuel Odonkor

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