Climate Change

World bodies release new principles on cost-effective carbon pricing schemes

New World Bank Report states that carbon-pricing schemes are worth US $50 billion

By DTE Staff
Published: Friday 18 September 2015
Big Nordenskioldbreen glacier on Svalbard. Photo: Flickr

The World Bank Group, the Organisation for Economic Co-operation (OECD) and the International Monetary Fund have done new research that lays out principles for governments and businesses to develop successful and cost-effective schemes to put a price on social costs of greenhouse gas emissions.

The research says that well-designed carbon pricing schemes are a powerful and flexible tool that can cut emissions causing climate change.

Meanwhile, a new World Bank Group report, State and Trends of Carbon Pricing 2015, has revealed that the number of implemented or planned carbon pricing schemes around the world has almost doubled since 2012, and is now worth about $50 billion.

"The world needs to find effective ways to reduce carbon pollution," said World Bank Group president, Jim Yong Kim. "We must design the best ways to price carbon in order to help cut pollution, improve people’s health, and provide governments with a pool of funds to drive investment in a cleaner future and to protect poor people."

"With COP21 fast approaching, the need for meaningful carbon policies is more important than ever. Carbon pricing is central to the quest for a cost-effective transition towards zero net emissions in the second half of the century. These principles will help governments to incorporate carbon pricing as a key part of their policy toolkit," said Angel Gurría, OECD Secretary-General.

"Carbon pricing is effective in reducing emissions that cause climate change, is straightforward to administer, can raise valuable revenues for broader fiscal reforms, and can help address local pollution as well as global climate change. We welcome the opportunity to continue collaborating with the World Bank, OECD, and others on this critical policy tool," said IMF’s managing director Christine Lagarde.

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