Wednesday, 3 September 2014

Building global support for emission pricing: A World Bank initiative

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

The World Bank and partners are inviting national and local governments and companies to show support for putting a price on carbon emissions by signing up to a pledge that will be circulated at the United Nations Secretary-General’s Climate Summit on 23 September 2014. To date, over 35 governments and 270 companies have participated. The key section of ‘Putting a Price on Carbon’ reads as follows:


Governments pledge to work with each other and companies pledge to work with governments towards the long-term objective of a carbon price applied throughout the global economy by: 
  • Strengthening carbon pricing policies to redirect investment commensurate with the scale of the climate challenge;
  • Bringing forward and strengthening the implementation of existing carbon pricing policies to better manage investment risks and opportunities;
  • Enhancing cooperation to share information, expertise and lessons learned on developing and implementing carbon pricing through various 'readiness' platforms. 
The pledge was developed through collaboration between the World Bank and organisations including the UN Global Compact, the Prince of Wales’ Corporate Leaders Group, CDP, the International Emissions Trading Association and the World Business Council on Sustainable Development.

As a complementary initiative, the World Bank’s Caring for Climate programme is inviting businesses to take their commitment to a higher level by applying Business Leadership Criteria on Carbon Pricing.  
Consistent with the 2° C global target, companies are invited to indicate alignment with the following criteria: 
  • Set an internal carbon price high enough to materially affect investment decisions to drive down greenhouse gas emissions;
  • Publicly advocate the importance of carbon pricing through policy mechanisms that take into account country specific economies and policy contexts; and
  • Communicate on progress over time on the two criteria above in public corporate reports.
The website provides instructions for governments and businesses that wish to sign up to the pledge. It also provides a series of background notes with global updates on ‘Carbon Pricing Readiness’, ‘Corporate Action for Putting a Price on Carbon’, ‘ETS’ and ‘Carbon Tax’.

According to the World Bank, as of May 2014, 39 national and 23 sub-national jurisdictions had implemented or were scheduled to implement carbon pricing through emissions trading systems and taxes.

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