Press Release No. 16/179

Press Release: Leaders Set Landmark Global Goals for Pricing Carbon Pollution Call for faster action on carbon pricing to deliver on Paris climate change agreement

April 21, 2016

Call for faster action on carbon pricing to deliver on Paris climate change agreement

Six heads of state and government, two city and state leaders, and the heads of the World Bank Group, the International Monetary Fund and the OECD today agreed on an ambitious global target for putting a price on carbon pollution.

The leaders, who are all members of the Carbon Pricing Panel, convened by World Bank Group President Jim Yong Kim and IMF Managing Director Christine Lagarde, challenged the world to expand carbon pricing to cover 25 percent of global emissions by 2020 – double the current level – and to achieve 50 percent coverage within the next decade.

The call, which comes on the eve of the signing ceremony in New York of the Paris COP21 Agreement, was made by the Prime Minister of Canada, Justin Trudeau, President of Chile Michelle Bachelet, Prime Minister of the Federal Republic of Ethiopia Hailemariam Dessalegn, President of France François Hollande, Chancellor of the Federal Republic of Germany Angela Merkel, and President of Mexico Enrique Peña Nieto, together with Bank Group President Kim, IMF Managing Director Lagarde, California Governor Edmund G. Brown Jr., Rio de Janeiro Mayor Eduardo Paes and OECD Secretary-General Angel Gurría.

“There is a growing sense of inevitability about putting a price on carbon pollution,” said World Bank Group President Jim Yong Kim. “In order to deliver on the promises of the historic Paris climate agreement, a price on carbon pollution will be essential to help cut emissions and drive investments into innovation and cleaner technologies. Prices for producing renewable energy are falling fast, and putting a price on carbon has the potential to make them even cheaper than fuels that pollute our planet.”

The call to expand carbon pricing was supported by United Nations Secretary-General Ban Ki-moon. "Carbon pricing is an invaluable tool for redirecting investments and transforming markets to build low-carbon, climate-resilient economies that will drive prosperity, strengthen security and improve the health and well-being of billions of people," he said.

In a joint vision statement released today, the leaders declared that carbon pricing needs to be implemented faster and further on a global scale to keep to the Paris COP21 commitment of holding the increase in the global average temperature to well below 2°C above pre-industrial levels, and drive efforts to keep the rise to no more than 1.5°C.

“Carbon pricing is the most effective policy for reducing emissions, raises significant revenues, is administratively straightforward, and can have substantial domestic health benefits. It should be front and center as countries move forward on their mitigation pledges for the landmark Paris Agreement,” said IMF Managing Director Lagarde.

The vision statement stresses that putting a price on carbon pollution is one of the most effective policies available for reducing emissions at scale while promoting green growth and creating green jobs.

In support of the global goals in the vision statement, Canada, Chile, Ethiopia, France, Germany, Mexico, California and Rio de Janeiro today committed to take specific actions to strengthen and expand carbon pricing mechanisms.

The call by the Carbon Pricing Panel complements the work of the Carbon Pricing Leadership Coalition, which brings together 24 countries and more than 90 global companies and strategic partners to push for action on carbon pricing by collecting and sharing best practices and mobilizing business support.

At present, some 40 countries and 23 cities, states and regions around the world are using carbon pollution pricing schemes, representing about 7 billion tons of carbon dioxide. The schemes, now worth about $50 billion, cover about 12 percent of global emissions, which is a threefold increase over the last decade.

The vision statement, which calls for that level to double by 2020 and double again within a decade, says it can be done in three ways: by increasing the number of governments putting a price on carbon, deepening existing carbon pricing programs, and promoting global cooperation.

For more information, please visit:

http://www.carbonpricingleadership.org/carbon-pricing-panel

Contacts:

In Washington:

Nicholas Keyes (202) 473-9135, nkeyes@worldbankgroup.org

Mehreen Sheikh (202) 458-7336, msheikh1@worldbankgroup.org

Wiktor Krzyzanowski (202) 623-7100, wkrzyzanowski@imf.org

For Broadcast Requests: Huma Imtiaz, (202) 473-2409, himtiaz@worldbankgroup.org

Quotes from Leaders:

Prime Minister Trudeau, Canada:

“Our government has heard loud and clear that Canadians care about standing up for our environment and our livelihoods. Carbon pricing is an effective tool to do just that – to reduce emissions and stimulate investments in green infrastructure and innovation. Thanks to early action by Canadian provinces, more than 85 percent of Canadians live in jurisdictions with existing or planned carbon pricing. 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, – so that our children and grandchildren can inherit a Canada more prosperous and sustainable than the one we know today.”

President Bachelet, Chile:

“The Paris Agreement must be implemented successfully to ensure a safer climate future. Our country will move towards fostering private and public partnerships that link climate technologies and financing. And we will continue to collaborate on green growth and carbon markets, as we stated in a Ministerial Declaration of the Pacific Alliance last month in Colombia. In the Panel we share a common vision in the panel that expanding carbon pricing in the world is good for the economy and the planet”.

Prime Minister Dessalegn, Ethiopia:

“We should now follow up the Paris Agreement with adequate actions, national policies, investment schemes and regional and international initiatives and partnerships. I iterate Ethiopia’s commitment to the global efforts to overcome dangerous climate change and ensure sustainable development. We will use every policy instrument, including carbon pricing, which is found to be effective, efficient and fair.”

President Hollande, France:

“The first chapter of the post-carbon era is being written under the French COP Presidency. As a front-runner, the Panel has the mission to go further in this direction. We now need to make carbon pricing levels consistent with the Paris Agreement objective, to broaden the scope of covered emissions and to initiate the convergence of carbon pricing schemes.”

Chancellor Merkel, Germany:

“With a price for carbon and a global carbon market, we can achieve our common goal – staying well below the 2 degree ceiling -- in such a way that is technology neutral, promoting innovation, market based and thus cost efficient.”

„Mit einem Preis für Kohlenstoff und einem globalen Kohlenstoffmarkt können wir unser gemeinsames Ziel - die deutliche Unterschreitung der 2 Grad-Obergrenze - technologieoffen, innovationsfördernd, marktbasiert und damit kosteneffizient erreichen.“

President Peña Nieto, Mexico:

“Mexico is convinced that in order to stabilize the increase in global temperature to 1.5°C above pre-industrial levels, a fair and real carbon price must be set. 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.”

COP21 President Ségolène Royal:

“Carbon pricing is an essential tool for implementing the Paris Agreement. I encourage governments and companies to join the Carbon Pricing Leadership Coalition (CPLC) to share best practices.”

Governor Brown, California:

“Carbon pollution threatens our wellbeing and it is imperative we put a price on it. California is already proving that we can take action to decarbonize and continue to grow our economy at the same time, but this effort must be global.”

Mayor Eduardo Paes, Rio de Janeiro:

“Cities have a major role to play in climate change and actions made by mayors could save 45 Gt CO2 by 2030 – equivalent to eight times the current emissions of the United States. More than half of the people in the world lives in cities. Cities are responsible for over 70 percent of energy-related carbon emissions. In Rio we will decrease gases emissions by 20 percent by 2020, and achieve carbon neutrality by 2065. Mayors are closer to the people, they can take actions faster. Carbon pricing will help us to implement the commitments we took in the Paris Agreement and foster the transition to a low carbon economy.”

Secretary-General Gurría, OECD:

“The OECD has been a strong advocate of carbon pricing for decades, starting with the development at the OECD of the polluter-pays principle back in the early 1970s. Governments have achieved an historic step forward at COP21, but 60 percent of OECD and select partner economy emissions are still not priced at all. Some of the most polluting fuels, such as coal, are often taxed at the lowest rates. Almost 800 spending programs and tax breaks are still used by OECD and major partner countries to encourage the production or use of fossil fuels. I therefore strongly support the ambition of the Carbon Pricing Panel to work together to broaden and deepen carbon pricing around the world.”