WASHINGTON, DC – In just six weeks, world leaders will meet in Paris to negotiate a new global climate-change agreement. To date, 150 countries have submitted plans detailing how they will move their economies along a more resilient low-carbon trajectory. These plans represent the first generation of investments to be made in order to build a competitive future without the dangerous levels of carbon-dioxide emissions that are now driving global warming.
The transition to a cleaner future will require both government action and the right incentives for the private sector. At the center should be a strong public policy that puts a price on carbon pollution. Placing a higher price on carbon-based fuels, electricity, and industrial activities will create incentives for the use of cleaner fuels, save energy, and promote a shift to greener investments. Measures such as carbon taxes and fees, emissions-trading programs and other pricing mechanisms, and removal of inefficient subsidies can give businesses and households the certainty and predictability they need to make long-term investments in climate-smart development.
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At the International Monetary Fund, the focus is on reforming its member countries’ 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. Pricing carbon can be about smarter, more efficient tax systems, rather than higher taxes.
Carbon taxes should be applied comprehensively to emissions from fossil fuels. The price must be high enough to achieve ambitious environmental goals, in alignment with national circumstances, and it must be stable, in order to encourage businesses and households to invest in clean technologies. Administering carbon taxes is straightforward and can build on existing road fuel taxes, which are well established in most countries.
Carbon pricing will be in many countries’ best interests, owing to the many domestic environmental benefits. For example, burning cleaner fuels helps to reduce outdoor air pollution, which, according to the World Health Organization, currently causes about 3.7 million premature deaths a year.
It is vitally important to address the impact of energy-price reforms on vulnerable groups in every society. So these reforms will need to be accompanied by adjustments to fiscal systems and safety nets, among other things, to ensure that the poor are not harmed.
The World Bank Group is supporting countries and businesses as they develop climate-friendly public policies, invest in carbon markets, and explore financial innovations to ease into low-carbon transitions. The Group is leveraging its experience and global reach for learning and knowledge exchange through programs like the Partnership for Market Readiness.
From that experience, we have developed, alongside the OECD, initial principles to help guide and inspire future carbon-pricing schemes. By drawing on these principles, countries, regions, states, and businesses can move faster to tackle the climate challenge confronting us all. The principles are based on fairness; alignment of policies and objectives; stability and predictability; transparency; efficiency and cost-effectiveness; and reliability and environmental integrity.
To help achieve our climate objectives, we need to promote dialogue about the necessary policy measures before and beyond the climate-change conference in Paris. That is why we are announcing a “Carbon Pricing Panel,” which will bring together heads of state, city and state leaders, and representatives of top companies to urge countries and businesses around the world to put a price on carbon.
These leaders have taken steps to price carbon pollution and catalyze greener investment in their own countries and regions. They include German Chancellor Angela Merkel, Chilean President Michelle Bachelet, French President François Hollande, Ethiopian Prime Minister Hailemariam Desalegn, Philippines President Benigno Aquino III, Mexican President Enrique Peña Nieto, Governor Jerry Brown of California, and Mayor Eduardo Paes of Rio de Janeiro.
Carbon pricing policies are already being implemented by some 40 national governments, including that of China, the world’s largest emitter, and 23 cities, states, and regions that are putting a price on carbon. Many other governments also are reforming energy prices, and more than 400 companies report using a voluntary, internal carbon price. That makes sense. Top companies must effectively manage exposure to climate risk in order to generate higher profits and ensure more stable earnings.
All of these actions are welcome; but we view them as being only initial steps. Together with the leaders of the Carbon Pricing Panel, we call on governments to seize the moment – for the sake of the planet and future generations – to put a price on carbon pollution that reflects the environmental damage it causes. We stand ready to support governments that act. The longer we wait, the costlier and more difficult it will be for us – and our children and grandchildren – to protect the planet.
Comments
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Comment Commented Paul Litely
Global Temperatures went up from 1973 to 2003, but went down before and after that 30 year period while CO2 rose continuously. See Paullitely.com for Putin's Science and Economy briefing 2004 for Kyoto on Global Warming, and proofs and details. Read more
Comment Commented Jason H
Taxing carbon probably would have worked if implemented back in the 80s when we first understood global warming. It's now too late for that. We need an Apollo project for the planet to build renewable infrastructure and help countries jump straight to rooftop solar and skip coal. It's the only way humans have a chance to continue in this planet. The planet doesn't care it will carry on for billions of more years without us. We will only be a blip in history at this rate. Read more
Comment Commented Pepy Sakellariou
'Carbon Emission Trading' between developed and emerging countries?
Who gets the lion’s (economic) share of this kind of trading?
Why world puts up with such unethical way of someone's polluting in favor of ones profits, at the expense of poor countries and of environment? Read more
Comment Commented Richard Choad
Chancellor Angela Merkel, Chilean President Michelle Bachelet, French President François Hollande, Ethiopian Prime Minister Hailemariam Desalegn, Philippines President Benigno Aquino III, Mexican President Enrique Peña Nieto, Governor Jerry Brown of California, and Mayor Eduardo Paes of Rio de Janeiro. PLEASE ADD GROUCHO, GHICO, HARPO, AND ZEPPO TO MAKE IT COMPLETE. Read more
Comment Commented Per Kurowski
"Carbon emissions-trading programs" somewhat similar to the indulgences sold in the middle ages,"I have bough the right to sin/contaminate", could introduce a lot of distorting corruption into the fight for a better environment, one that could be justified independently of climate change threats. And, if carbon taxes are not strictly tax neutral, then these will soon be denounced as a hoax. Read more
Comment Commented Randy James
Giving carbon-tax revenue to corrupt governments (all and or any of them) is an amusing idea. And it puts the "climate change summit" in proper perspective. Climate change has been, and will continue to be a sacred-cow political excuse for politicians to do what they always do: line their pockets.
Meanwhile, back in the real world, we are about to pass the 40-gigaton per-year carbon-release milestone this year, and while some may be slow to admit it, there is a general consensus in the scientific community that we are already well-past the tipping point where any amount of 'conservation' will prevent the accelerating pace of global warming.
If you posed the question: If we cut our carbon-emissions in half right away (from 40-gt to 20-gt per year), would it have any noticeable impact on the continued warming of the atmosphere and oceans?
Most with qualifications to opine would say "probably not". The fact that politicians have focused on carbon-taxes as a means of establishing their credentials as "green-activists" fbo "green-consuming" professional altruists on the left, simply underscores a common theme: liberalism is a big business, and the goal is the same as for all big businesses: make more money.
In fact, we need leaders capable of recognizing the magnitude of the threats we face now, and start thinking about how to do something about them. What are they?
1. What are we prepared to do to prevent the continued melting of land-ice in Greenland and the Antarctic?
2. At what point will major developed countries confront the possibility of sudden, cataclysmic releases of water or land-ice? For example, researchers have discovered at least one massive iiquid water aquifer under the ice-pack in Greenland covering 70,000 sq. km. with enough water to raise sea-levels 0.5mm alone (and this does not take into account the potential domino effect on surrounding faults, should that one aquifer find an open pathway to the ocean).
The fact is, while the official scientific forecast for sea-level increases is in the vicinity of 1-meter by 2100, there are numerous un-quantified (but plausible) risk scenarios which could contribute to something far more dramatic, much sooner. How about 6-meters by 2030? If you own property in Manhattan, or Florida, you'll want to keep an eye on this.
3. Then there's the frozen methane problem. Climate scientists estimate from 1000 gigatons, to 3000 gigatons of frozen sea-bed methane, and frozen tundra methane are at risk of producing sudden "burps" of 50 to 300 gigatons as temperatures continue their steady march upwards.
To put that in perspective: these same scientists estimate the total human-caused emissions in the last 200 years at roughly 350-gigatons. Given that even if we were to actually able to halt the increase in the amount of carbon we emit each year, and hold it steady at 40-gt, temperatures will continue to rise, which leaders of which wealthy highly industrialized nations have put the question on the table:
What can we do to prevent one or more massive releases of methane into the atmosphere, the possibility of which already exists right now? For example: might it not be a good idea to deploy sensors in the shallow seas off the coast of Siberia to monitor the release of frozen methane from those sea-beds?
Since it appears some melting is inevitable, perhaps we should engage our energy companies to find ways to extract the methane before it melts?
The bottom-line of this rant? The political class globally is driven by two things: personal monetary enrichment, and preservation of their hegemony over whatever public authorities they've managed to usurp. If would really be better if those people would retire. We need leaders who recognize the magnitude of the global carnage which will ensue if we simply stand by and do nothing while sea-levels rise 2-meters, 5-meters, 20-meters... I wonder if anyone has a computer model which will predict at what sea-level increase, a nuclear war will inevitably break out due to the displacement and incipient starvation of "a billion or so" human beings?
Even more sinister: I wonder if they've already done the calculations, and are planning on it. Read more
Comment Commented Brent Beach
Tying the carbon tax issue to the government corruption issue is wrong. If you have a corrupt government then you can tie anything you don't want to it and never do anything. You can tie anything you do want to apple pie and get that done.
Neither result actually decides if the carbon tax issue alone is worth doing.
This is the question at hand.
This is a problem we all have to solve.
Look for advice on solving government corruption in other articles. Read more
Comment Commented simon noble
The WHO has become a joke in its biased pronouncements on climate change related deaths. Carbon tax is not only a huge gift to bankers it will also hurt the poor the most. Lagarde and Kim should focus on poverty, not fashionable politics. if they invested most of their effort in ensuring an honest rule of law and honest policing the would make a real change. Read more
Comment Commented Brent Beach
Carbon tax a gift to bankers?
British Columbia, Canada, has a revenue neutral carbon tax. Taxes on carbon are offset by reductions in personal income tax, plus other regional offsets (more offset in rural, colder parts of the province).
No bankers involved.
No buying an selling of carbon credits.
The only political input to the process was to exempt some industries that are energy intensive to ensure the local companies would still be competitive with foreign suppliers. Once we have widespread carbon taxes, these exemptions can be eliminated.
So, no bankers enriched or even involved.
No net gain in taxes - audited by our external auditor general.
The provincial economy grew faster than that of the rest of Canada in the first 10 years of the tax and our carbon footprint dropped the most of any province in Canada.
Get informed.
You too could become a big fan of carbon taxes. Read more
Comment Commented Marta Gillette
This carbon pricing scheme is nothing but another financial scam where the elites can siphon off even more of our non-existent cash via artificially imposed taxes that benefit the Corporates, all paid for by the rank and file taxpayer in each respective country. It's an absolutely insane scheme where corporations and countries can buy the right to pollute what little pristine land is left on earth and force the peasants to pay for it and at the same time create more artificial financial instruments of destruction that are completely worthless and only do harm, all justified under the banner of what presumably is supposed to "save the earth", which these carbon taxes are not designed to do at all. Enough. Read more
Comment Commented Nathan Weatherdon
"buying the right to pollute" doesn't sound nice, but it's also the economically optimal way to reduce pollution. Only those companies with the most efficient production, but which still "need" to pollute a bit will be able to afford it, while low-efficiency producers will not have the option. Read more
Comment Commented eusebio manuel
OH my goodness someday CO2 warms the planet myth will be ridiculed by all but I doubt I´II see that there+s a lot of money and fame and not understand the ruth Happy Sustainability 2015 Read more
Comment Commented Nathan Weatherdon
Mr science guy, please explain to us the meaning of the 5-year moving average on the following graph produced by NASA: http://data.giss.nasa.gov/gistemp/graphs_v3/ Read more
Comment Commented Chewbaca Nonofurbeezwax
Stop calling CO2 "pollution." It makes you sound terribly ignorant. Do you exhale "pollution"? Is it "pollution" in your soda? Do plants require "pollution" for photosynthesis? Even the notion that CO2 is trapping heat has been discredited, as CO2 concentrations have risen over the last 20 years, yet the satellite temperature record shows NO warming for all of that time. Pathetic propaganda indeed. Read more
Comment Commented Jason H
Quick look at NASA's measurement of temperatures: http://climate.nasa.gov/vital-signs/global-temperature/ it's got a definite vertical incline. If you know something different quick tell the scientists so they will know. Read more
Comment Commented Nathan Weatherdon
"Pollution" is all things that have negative economic externalities. Or, according to the wikipedia definition: "Pollution is the introduction of contaminants into the natural environment that cause adverse change."
CO2 has negative economic externalities. It introduces adverse change. Read more
Comment Commented Frans Verhagen
I think Fee-and-Dividend carbon reduction methodology has probably more advantages in terms of social acceptance than regular carbon taxes.
An innovative and even transformational way of using the Fee-and-Dividend method is to use it as part of carbon-based international monetary system as presented in Verhagen 2012 “The Tierra Solution: Resolving the climate crisis through monetary transformation” and updated at www.timun.net. The system is based upon the monetary standard of a specific tonnage of CO2e per person and proposes a global central bank and a modified balance of payments system that accounts for both financial and ecological (climate) debts and credits.
Read more
Comment Commented Michael Public
The Republicans will not go for this. Read more
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