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Now is the time to put a price on carbon
22 October 2015

Now Is the Time to Put a Price on Carbon

Huffington Post 21 October, 2015 (World Bank and IMF)

WASHINGTON -- In just six weeks, world leaders will meet in Paris to negotiate a new global climate change agreement. To date, some 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...

...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 policies are already being implemented by some 40 national governmentsincluding 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...

The full article can be found here.


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