Wednesday, May 15, 2013

World Bank President Advocates Putting a Price on Carbon

Many believe that putting a price on carbon is the best way to combat climate change. Now the chorus of those calling for just that has been joined by World Bank President Jim Yong Kim. He recently urged the world’s environmental ministers to implement a five-point plan that includes putting a price on carbon dioxide emissions, improving agricultural practices and ending fossil fuel subsidies.

Kim urged more countries to roll out price mechanisms either through a tax on carbon, indirect taxation, regulation or creation of a carbon market. Kim made the remarks to 30 of the world's environment ministers gathered in Berlin for informal talks on a new global climate deal to take effect in 2020.

The European Union's Emissions Trading Scheme is struggling with low prices and may require action from EU policymakers. German Chancellor Angela Merkel has said the EU should take action on a plan to postpone the supply of permits.

Conversely, the Easter Regional Greenhouse Gas Initiative (RGGI) is doing much better than their European counterparts.  California’s recent carbon auction fared well and the addition of five Canadian provinces has rejuvenated the Western Climate Initiative (WCI). The five Canadian provinces replace six US states (New Mexico, Arizona, Washington, Oregon, Montana and Utah) that abandoned the WCI making it the biggest North American carbon trading market by value.

Overall the North America carbon trading market doubled in 2012 with the inauguration of carbon markets in California and Quebec.

© 2013, Richard Matthews. All rights reserved.

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