World, business leaders call for global carbon pricing policies

Jim Yong Kim

World Bank President, Jim Yong Kim [World Bank Photo Collection/Flickr]

A half dozen heads of state joined forces with leaders of cities and corporations on Monday (19 October) to call for wider adoption of carbon pricing policies ahead of a United Nations climate change summit in Paris in December.

German Chancellor Angela Merkel, Philippines President Benigno Aquino III and French President François Hollande were among the world leaders who issued a joint statement through the World Bank urging governments and businesses to set up carbon markets and tax carbon emissions.

Representatives from 190 countries are meeting in Bonn, Germany, this week, for last-round discussions on the language of a global climate change agreement. The global deal would require developing and developed countries to adopt policies to curb carbon emissions.

A draft of the agreement to be approved in Paris currently excludes language on carbon pricing because some countries are opposed to the use of markets to address climate change.

“We should advance our effort along this path further so that we can actually reach our goal,” German Chancellor Angela Merkel said in the statement.

Convened by World Bank Group President Jim Yong Kim and the International Monetary Fund’s Managing Director Christine Lagarde, the high-level Carbon Pricing Panel is calling on their peers to follow their lead and put a price on carbon. Private sector support is led by Anne Stausboll, CEO of US Institutional Investor CalPERS, Gérard Mestrallet, CEO of ENGIE of France, Anand Mahindra, Chairman and Managing Director of Mahindra Group of India, and Feike Sijbesma, Chairman and CEO of Netherlands-based Royal DSM

As the European Union continues to refine its own emissions trading scheme and the world’s biggest emitter China launches its own national market next year, some countries and companies have pushed for a UN climate agreement to create rules to enable international trading.

Separately, US President Barack Obama on Monday announced that 81 companies have backed a US-sponsored pledge supporting action to combat climate change. The pledge’s signatories span the spectrum of major American corporations, and include Bank of America, Best Buy, Coca-Cola, General Motors, Intel, Johnson & Johnson and Berkshire Hathaway. 

Obama name-checked WalMart Stores Inc for installing solar capacity, Intel, which has invested in energy and water conservation programs, and Google, Apple and Costco for their purchases of renewable energy, among others.

“The perception is that this is an environmental issue, it’s for tree-huggers, and that hard-headed business people either don’t care about it or see it as a conflict with their bottom lines,” Obama told reporters after the meeting.

“I just want everybody to understand that American businesses want this to happen as well,” he said.

Negotiations on climate change began in 1992, and the UN organises an annual international climate change conference called the Conference of the Parties, or COP.

The 20th COP took place in Lima, Peru, from 1 to 12 December 2014, and Paris is hosting the all-important 21st conference in December 2015.

The participating states must reach an agreement to replace the Kyoto Protocol, the object of which was to reduce CO2 emissions between 2008 and 2012.

The EU’s contribution to the UN agreement is based on deal reached by EU leaders in October 2014. It sets out a binding emissions reduction goal of at least 40% by 2030 compared to 1990. The objective is described in the agreement as “a binding, economy-wide reduction target, covering all sectors and all sources of emissions, including agriculture, forestry and other land uses”.

>> Read: EU leaders adopt 'flexible' energy and climate targets for 2030

Agreeing on a UN framework, whether legally binding or not, is the priority between now and December.

  • 19-23 Oct.: UN climate talks in Bonn
  • 1 Nov.: UN summary of all commitments
  • ?30 Nov.-11 Dec.: 21st yearly session of the Conference of the Parties (COP 21) in Paris

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