The Carbon Pricing Leadership Coalition (CPLC): an international coalition for global carbon pricing

CPCL_Groupe Banque mondialeJeff Martin

28 Apr The Carbon Pricing Leadership Coalition (CPLC): an international coalition for global carbon pricing

A high-level international initiative

The Carbon Pricing Leadership Coalition (CPLC), which brings together 25 countries and local actors, including France, and over 100 companies, held its first High-Level Assembly on 14 April in Washington, alongside the Spring Meetings of the IMF and the World Bank Group.

The CPLC is a global initiative which brings together the public and private sectors (read the list of members here) and aims to support and encourage the worldwide implementation of carbon pricing. The idea of this coalition was presented by the World Bank at the United Nations Climate Summit in New York in 2014, but the initiative was officially launched during COP21 on 30 November 2015 (read the press release here).

Why put a price on carbon?

The price of carbon is the price paid to cover the impact of greenhouse gas (GHG) emissions on the environment. Setting a carbon price means creating an effective tool to encourage the transition towards greener energy: producing energy from fossil fuels – which generate high GHG emissions – becomes more expensive and thus less attractive, freeing up capital to help promote zero-carbon solutions.

Currently, almost 12% of CO2 emissions are covered by a pricing mechanism – either a tax or an emissions trading system. In the 90 national contributions published by countries before the Paris Climate Conference, carbon pricing is mentioned as a tool that will be used to achieve greenhouse gas emission targets.

 

Carte INDC

source : www.ieta.org

Article 137 of the Paris Agreement “recognizes the important role of providing incentives for emission reduction activities, including tools such as domestic policies and carbon pricing”. The Agreement also encourages countries to agree on shared rules for the use of these pricing tools, which are one of the solutions available to them, alongside other domestic policies.

Promoting effective carbon pricing policies

The CPLC Assembly, co-chaired by the President of COP21, Ségolène Royal, aimed to build on the momentum generated by COP21 and promote carbon pricing policies to limit global warming. At this event, Ségolène Royal made two proposals:

  • Setting a significant carbon price in countries, businesses and territories to guide corporate investment decisions. Ségolène Royal welcomed the fact that 450 companies worldwide currently have internal carbon prices of up to $30 per tonne.
  • Supporting operational carbon pricing projects in volunteer territories, especially through the expertise of the World Bank.

On 21 April, six Heads of State and Government – the President of the French Republic, François Hollande, the Canadian Prime Minister, Justin Trudeau, the President of Chile, Michelle Bachelet, the Ethiopian Prime Minister, Hailemariam Desalegn, the German Chancellor, Angela Merkel, and the President of Mexico, Enrique Peña Nieto – as well as the Governor of California, Edmund G. Brown Jr. and the Mayor of Rio de Janeiro, Eduardo Paes, in collaboration with the President of the World Bank Group, Jim Yong Kim, the Managing Director of the IMF, Christine Lagarde, the Secretary-General of the Organisation for Economic Co-operation and Development (OECD), Angel Gurría and the President of COP21, Ségolène Royal, all of whom are members of the CPLC, proposed an ambitious target: increasing the coverage of greenhouse gas emissions by carbon pricing tools two-fold by 2020 and four-fold by 2030, to reach 50% coverage of global emissions.

Read the press release here.

 

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