The World Bank said Monday that 73 national and 11 regional governments and some 1,000 companies will join forces to push for policies setting a price on carbon emissions to encourage a shift to cleaner energy technologies.
The announcement aims to build momentum for a high-profile UN summit on climate change on Tuesday that Secretary General Ban Ki-moon hopes will mobilize governments and the private sector to make "bold commitments" to address climate change.
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The World Bank and United Nations have been strong advocates for policies that shift the responsibility to polluters to pay for carbon emissions.
On Sunday evening, the UN General Assembly headquarters was lit up with a projection across it saying "Put a Price on Carbon."
Big emitters such as China and EU countries joined growing economies and some of the least developed nations to form the Carbon Pricing Leadership Coalition, the World Bank announced, an effort to encourage countries to adopt measures such as carbon taxes or cap-and-trade systems to drive a reduction in carbon emissions across the world.
The list does not include the Canadian government, but does include the government of oil-rich Alberta. It also includes two other provinces — B.C. and Quebec — whose carbon pricing and emissions trading policies are featured in the World Bank news release.
- Read the World Bank's statement on carbon pricing
- Read the full list of governments and companies supporting the statement
Companies such as airline group IAG and electric utility Électricité de France, are also expected to back the coalition, which Kim said will spur "action across their sectors, supply chains, and with their neighbours and allies."
Many large companies believe widespread carbon pricing would signal long-term, stable investment rather than uncertain and potentially more costly policies in future.
"Governments representing almost half of the world's population and 52 per cent of global GDP have thrown their weight behind a price on carbon as a necessary, if insufficient, solution to climate change and a step on the path to low carbon growth," said World Bank president Jim Yong Kim in a statement.
Setting a price for each tonne of carbon that emitters produce is meant to encourage companies to adopt cleaner technologies and shift away from using fossil fuels.
Existing carbon taxes, emissions trading schemes
Around 40 countries and over 20 states, regions or cities have either set up or are planning to set up emissions trading schemes or carbon taxes. Together, they account for more than 22 per cent of global emissions.
While national governments from Berlin to Beijing have embraced market-based solutions to combat climate change, a polarized U.S. Congress has rejected measures to set a national price on carbon. States such as California and New York have their own carbon initiatives in place.
Using a carbon price sends an economic signal, forcing polluters to decide whether to reduce emissions, curtail their polluting activity, or pay for each ton they emit, and is the "least cost way" for countries to meet their environmental goals, Kim wrote in a recent blog post on the subject.