With more than 60 governments and 1,200 businesses now pricing carbon emissions, the Carbon Pricing Leadership Coalition (CPLC) and a group of 200 organizations have issued a global call to action for the establishment of an international carbon pricing system, in an effort to achieve the 2°C target outlined in the Paris Climate Agreement.
The CPLC convened for its Second High Level Assembly earlier this month, where businesses, governments and organizations such as the World Bank Group and International Monetary Fund gathered to discuss the role of the financial sector in delivering investment and mitigating climate risk.
Carbon pricing was highlighted as one of “the most potent and efficient strategies” being used to reduce carbon emissions and transformational in the facilitation of the shift towards a low-carbon economy.
“We need to rethink how to bring the private and public sectors together to move immediately on both mitigation and adaptation. This coordination will allow us to have the largest possible impact now, and stimulate the market to generate more investment in things like a sustainable energy in the future,” said Jim Yong Kim, President of the World Bank Group.
“One effective tool to combat climate change is carbon pricing, which translates carbon pollution into a price that businesses, governments, and consumers can factor into their investment decisions. Carbon pricing provides the most stable and predictable path for transitioning countries’ economies toward lower-carbon output.”
In the Coalition’s latest Carbon Pricing Leadership Report, the CPLC states that while organizations are increasingly adopting carbon pricing practices, more action is needed in order to keep warming below 2° C and avoid the most serious impacts of climate change.
By providing suggestions and sharing actions already being taken by governments, businesses and organizations around the world, the group aims to expand carbon pricing with the goal of covering 25 percent of global emissions by 2020 — double the current level — and 50 percent within the next decade.
During the High Level Assembly, financial heavy hitters such as HSBC, BNP Paribas and Turkey’s Garanti Bank made commitments to use the CPLC to explore how to address climate risk in their portfolios through internal carbon pricing and Cote d’Ivoire Prime Minister Amadou Gon Coulibaly explained how the country is exploring carbon pricing as a way to address poverty while achieving their climate targets. China also announced that it will launch a national Emissions Trading System later this year and seven of the world’s largest economies — including the US and the UK — have already introduced a price for carbon.
The CPLC points to businesses as the center to their work and is calling upon organizations to share their stories, engage with industry peers to highlight the case for carbon pricing and bring new voices to the table, and create a dialogue with internal stakeholders on the benefits of carbon pricing.
“Climate change has been a growing crisis for decades, and we’re running out of time,” said Yong Kim. “I hope that by sharing these success stories, we can inspire others to discover their own solutions and move with the speed and scale we need to finally address climate change.”