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World Bank Issues Draft Statement Carbon Pricing

World Bank5 May 2014: The World Bank is calling on countries and companies to back a proposed statement on carbon pricing that is expected to be launched at the UN Secretary-General's Climate Summit on 23 September 2014.

Speaking at a session on carbon pricing during the Abu Dhabi Ascent, a preparatory meeting for the Climate Summit, Rachel Kyte, World Bank Vice-President and Special Envoy for Climate Change, stated that “a carbon price provides a necessary signal for investment in low-carbon and resilient growth." She stressed the need to include carbon pricing in "any package of policies to scale up mitigation," adding that the Bank's draft statement "reflects a sense of urgency and inevitably for carbon pricing."

Speaking to the press before a closed-door meeting with finance ministers in April, World Bank President Jim Yong Kim also urged governments to take on the issue of carbon pricing "despite the fact that it is controversial."

The focus of the debate over carbon pricing has evolved from whether to have carbon pricing to how to effectively put a price on carbon, and a number of countries, provinces and cities are already developing carbon-pricing policies and instruments.

The draft statement, titled ‘Pricing Carbon to Achieve Climate Mitigation and Development Goals,' stresses that climate change is "one of the greatest global challenges" and threatens to undo "decades of development and prosperity."

It underlines that the contribution of Working Group III of the Intergovernmental Panel on Climate Change (IPCC) to the Fifth Assessment Report (AR5), titled 'Climate Change 2014: Mitigation of Climate Change,' stresses the importance of putting a price on carbon to help limit global mean temperature increase to 2°C above pre-industrial levels.

It further states, inter alia, that: depending on each country's circumstances and priorities, various instruments can be used to price carbon, such as emissions trading systems, carbon taxes and/or payments for emission reductions; in 2014, over 40 national and 20 subnational jurisdictions adopted emissions trading schemes or carbon taxes, accounting for 22% of global emissions; and companies are working within carbon pricing systems, developing expertise in managing their emissions, and incorporating emission reduction targets into business planning.

The proposed statement states that governments and companies pledge to work together to apply a carbon price throughout the global economy by: strengthening carbon-pricing policies that help redirect investment toward meeting the climate challenge; implementing existing carbon pricing policies to better manage investment risks and opportunities; and enhancing cooperation to share information, expertise and lessons learned on developing and implementing carbon pricing through "readiness" platforms.

It further invites all countries, companies and other stakeholders to join the "growing coalition of the working." [World Bank Press Release] [Draft Statement on Pricing Carbon] [IISD RS Story on the Abu Dhabi Ascent] [World Bank Pricing Carbon Webpage]