The World Bank has concluded that carbon pricing schemes globally have almost doubled since 2012, and are now worth about $50 billion.
In a new Feature Story on its website, The World Bank Group have praised the efforts of nations, cities, and businesses the world over, for implementing carbon pricing schemes. The Feature Story was also accompanied by a new report, published by the World Bank Group and Ecofys, in conjunction with the OECD and with input from the International Monetary Fund (IMF), which claims that the number of implemented or planned carbon pricing schemes globally has almost doubled since 2012, and is now worth about $50 billion.
Specifically, around 40 nations and 23 cities, states, or regions are now using a carbon price, representing the equivalent of about 7 billion tonnes of carbon dioxide, or 12% of annual global greenhouse gas emissions — showing just how powerful carbon pricing can be.
“The world needs to find effective ways to reduce carbon pollution,” said Jim Yong Kim, World Bank Group President. “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.”
In another report, the World Bank Group lays out six key principles, the FASTER Principles, for putting a price on carbon based on economic principles and experience of what has come before — what has worked, what hasn’t, and how best to do it:
- Alignment of policies and objectives
- Stability and predictability
- Efficiency and cost-effectiveness
- Reliability and environmental integrity
“With COP21 fast approaching, the need for meaningful carbon policies is more important than ever,” said said Angel Gurría, Secretary-General of the OECD. “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.”
With over a decade’s experience supporting the findings from the FASTER report, governments and businesses will have access to a knowledge-base of what has worked before, and what hasn’t. The World Bank explains that:
” … well-designed carbon pricing schemes are a powerful and flexible tool that can cut emissions that cause climate change and if adequately designed and implemented can play a key role in enhancing innovation and smoothing the transition to a prosperous, low-carbon global economy.”
“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,” said said Christine Lagarde, Managing Director of the International Monetary Fund. “We welcome the opportunity to continue collaborating with the World Bank, OECD, and others on this critical policy tool.”
The reports and the World Bank’s feature article come at an opportune time, considering China’s breathtaking announcement of a new carbon trading system designed to help reduce the country’s greenhouse gas emissions. Chinese President Xi Jinping last week made the announcement jointly with US President Barack Obama during the former’s US tour, explaining that his country’s new carbon trading system will be a cap-and-trade system, the world’s largest emissions trading program, intended to be launched in 2017.
And while some countries remain stoically against such schemes (with Australia as a prime example, being the only country to ever roll back a carbon trading scheme), the World Bank’s reports are sure to garner a lot of international attention, which will surely continue to rise the profile of carbon trading schemes as an effective means to combat environmental concerns.