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OECD Calls For Braver Carbon Tax, Pricing Policies

by Ulrika Lomas,, Brussels

02 November 2017

Speaking on November 1, the OECD's Secretary-General, Angel Gurria, called on countries to be more ambitious in executing policies to curb environmentally damaging emissions globally and look beyond "narrow national policy agendas."

"Wherever in the world they are emitted, greenhouse gases have a global impact. Narrow national agendas are inadequate to deal with global climate change disruption," Gurria said in a lecture hosted by the Munk School of Global Affairs in Toronto. He said the level of mitigation action by countries, and the carbon prices that governments set, should reflect the global, not national, benefits of climate action.

"Short-termism and a narrow focus on national interests undermine effective action on emissions," Gurria said. "Without vision and resolve, more countries may yet retreat further into their national bunkers … We would all suffer in such a bleak scenario." He reiterated his hope that the US Government might in the future reconsider its decision to pull out of the Paris Agreement.

Gurrria said economic conditions in many countries provide a window of opportunity to take action now to boost growth and investment that will drive the transition to a prosperous and inclusive low-emissions, resilient future. Ambitious climate policy is simply good policy, he said, adding "Governments should move faster to phase out fossil fuel subsidies, which still amount to around half a trillion dollars a year."

Noting that emission reductions pledged so far by countries still leave the world on course for an average end-of-century rise in global surface temperature of between 2.6 and 3.1 degrees Celsius, Gurria said countries need to set more ambitious long-term emissions targets. To deliver on these, governments needed to set carbon prices that increasingly reflect the global, not just the national, social cost of carbon and align their policy, financial, and planning frameworks to deliver inclusive, climate-compatible growth.

"While it is encouraging to see states, cities, businesses and individuals pushing ahead with green initiatives, their effectiveness of their efforts will depend to a large extent on whether national governments facilitate or block their efforts," he said. "Governments should remove inconsistencies between economic and climate policies and introduce measures to spur green investment and innovation."

TAGS: individuals | environment | tax | investment | business | interest | carbon tax

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