Heads of state including German Chancellor Angela Merkel and French president François Hollande back global calls for a price on carbon ahead of Paris summit
The pressure on countries to introduce carbon pricing schemes intensified this week after a coalition of world leaders and companies called for their peers to take action on the issue ahead of next month's climate summit in Paris.
Members of the Carbon Pricing Panel, which includes German Chancellor Angela Merkel, French President François Hollande and the mayor of Rio de Janeiro Eduardo Paes, on Monday made a series of declarations in support of establishing carbon pricing mechanisms around the world.
The leaders aim to raise awareness of the issue of carbon pricing ahead of the upcoming Paris climate conference. However, few parties expect to see provisions for a carbon price forming part of an international agreement.
Instead, Angel Gurria, secretary-general of the OECD, said carbon pricing will form part of domestic policy making that will help countries work towards the broad climate goals agreed at COP 21.
The panel's stance is also supported by a range of private sector organisations, including French utility firm Engie and Dutch life and materials sciences firm Royal DSM.
Jim Yong Kim, president of the World Bank and convenor of the panel, said the level of unified support for carbon pricing was unprecedented. "It marks a turning point from the debate on the economic systems needed for low carbon growth to the implementation of policies and pricing mechanisms to deliver jobs, clean growth and prosperity," he said in a statement.
In individual comments, world leaders expressed optimism that carbon pricing could help drive investment in low-carbon technologies.
Hollande called on countries to act "with resolve" to set up a carbon price. "If we really want to send market signals to enable enterprises to make their decisions under optimal economic conditions, which may be optimal ecological conditions, then the issue of carbon prices inevitably arises as it is the most tangible signal that can be sent to all economic actors," he said.
The intervention joins calls from certain sectors of the business community in support of carbon pricing mechanisms. Yesterday resource management giant Veolia called for a corporate carbon tax - set between €30 and €40 per tonne of carbon dioxide - to be implemented at COP 21.
Jonathan Grant, director of sustainability and climate change at PwC, described carbon pricing as a "silver bullet" for tackling emissions growth, but said the strategy is "still not getting the attention it needs".
"At present, 73 governments have proposed using market mechanisms to achieve their Paris targets, so there is an obvious need for common standards and the ability to link systems together," he said in a statement.
"If a resolution isn't reached at COP21, there is a risk that businesses will face a complex and costly patchwork of climate regulation around the world which will invariably raise concerns about competitiveness."
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