World Bank: Carbon pricing 'fundamental step' to fight climate change

A sugar refinery emits thick smoke. Is carbon pricing the way to go in fighting climate change? Photo by: Monica McGivern / CC BY-ND

As world leaders, mayors, CEOs, environmental advocates, civil society and other stakeholders get ready to attend the U.N. Climate Summit on Sept. 23 in New York, one of the main items on the agenda is which price to put on carbon pollution.

Seen by experts as a key weapon to fight global warming, carbon pricing schemes have been already implemented in almost 40 countries around the world, where local governments use mechanisms like emissions trading systems or carbon taxes.

The private sector — even large corporations that used to oppose such legislation in the past — is increasingly supporting this drive, but more support is needed to limit the increase in global mean temperature to 2 degrees Celsius above pre-industrial levels.

That’s why the World Bank launched in June a campaign arguing that carbon pricing is “inevitable” if the world is to cut its emissions in a cost-effective way.

Putting a price on carbon pollution is a “fundamental step” in the struggle against global warming, according to Rachel Kyte, vice president and special envoy for climate change at the Washington, D.C.-based financial institution.

Kyte told Devex she expects carbon pricing to be discussed at length during the summit, and added stakeholders have a responsibility to keep the conversation going.

“Civil society needs to constantly demand leadership back home,” she said, underscoring the importance of dialogue between business leaders and policy makers when seeking to address climate change.

Ahead of the summit, U.N. Secretary-General Ban Ki-moon has called on CEOs to demonstrate leadership in pricing the cost of carbon emissions by signing up to the Business Leadership Criteria on Carbon Pricing, developed to inspire companies to reach the next level of climate performance through three dimensions:

● Integrating carbon pricing into long-term strategies and investment decisions.

● Responsible policy advocacy.

● Communication on progress.

Companies from around the world have been invited to review the criteria and announce if they will adhere to it if they want to be featured at the U.N. Climate Summit.

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About the author

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    Jeff Tyson

    Jeff is a global development reporter for Devex. Based in Washington, DC, he covers multilateral affairs, U.S. aid and international development trends. He has worked with human rights organizations in both Senegal and the United States, and prior to joining Devex worked as a production assistant at National Public Radio. He holds a master's degree in journalism from Columbia University and a bachelor’s degree in international relations and French from the University of Rochester.