ENERGY TRANSITION: Carbon pricing needs internationally agreed floor, IMF expert says

An internationally coordinated floor on the price of carbon could be “strikingly effective” in reducing greenhouse gas emissions, compared with alternatives such as annual targets or a carbon border adjustment mechanism (CBAM), according to a policy expert at the International Monetary Fund (IMF).

His comments come ahead of the 26th United Nations Climate Change Conference of the Parties (COP26) in November 2021, which will bring parties together to accelerate action toward the goals of the Paris Agreement and the UN Framework Convention on Climate Change.
Ian Parry, the principal environmental fiscal policy expert in the IMF’s Fiscal Affairs department, said that a global carbon price of about $75 per tonne is needed to reduce emissions enough to keep global warming below 2°C (35.6°F). But the global average carbon price is currently just $3 per tonne, he said.

“A 2030 price floor of $75 per tonne for advanced economies, $50 per tonne for high-income emerging market economies such as China, and $25 per tonne for lower-income emerging markets such as India, would keep warming below 2°C with just six participants - Canada, China, the EU, India, the UK and the...

Published

Andrea Hotter

September 14, 2021

19:05 GMT

New York