Leaders And CEOs Call For Price On Carbon

by Ulrika Lomas, Tax-News.com, Brussels

03 December 2015

Business leaders have joined political leaders, the World Bank, and the International Monetary Fund in calling for governments to put a price on carbon emissions.

In what the World Bank described as "a remarkable show of unity" on the first day of the Paris climate summit, heads of state from a number of countries called on the world to start pricing carbon pollution to help combat global climate change, including French President François Hollande, German Chancellor Angela Merkel, Mexican President Enrique Peña Nieto, Canadian Prime Minisiter Justin Trudeau, Ethiopean Prime Minisiter Hailemariam Dessalegn, and Chilean President Michelle Bachelet.

"The goal is to gradually set a sufficiently high carbon price around the world to encourage better behavior," said Hollande.

"Very quickly, a company consuming less CO2 should gain a decisive competitive advantage," the French President added.

Under the Energy Transition Act, France is planning for a substantial increase in the price of carbon, to EUR22 (USD23.30) per metric tonne next year and a projected EUR100 by 2030.

France joins a group of about 40 nations and 23 cities, states, and regions that have implemented or are in the process of putting a price on carbon. These carbon pricing mechanisms cover about 12 percent of global greenhouse gas (GHG) emissions, a percentage that is expected to rise significantly when China's carbon tax is introduced in 2017.

A recent World Bank report shows the number of implemented or planned carbon pricing schemes around the world has almost doubled since 2012 and are now worth about USD50bn.

The call by heads of state and government was echoed by ministers and CEOs from around the world at another event in Paris to officially launch the Carbon Pricing Leadership Coalition. The Coalition includes governments such as Mexico, Germany, France, Chile, and California, and nearly 90 global businesses and non-governmental organizations and will act as a forum for the assessment and discussion of carbon pricing systems and other measures to discourage GHG emissions.

"These statements of support from leaders today are critically important, as is the work of Carbon Pricing Leadership Coalition," said World Bank Group President Jim Yong Kim. "We must ensure that this momentum for carbon pricing translates into impact on the ground."

IMF Managing Director Christine Lagarde added: "The right carbon price should be at the center of this effort. Indeed, given the slump in energy prices, there has never been a better time to transition to smart, credible and effective carbon pricing. Policy makers need to price it right, tax it smart, and do it now."

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