Carbon Pricing Report launched by leading economists

Meeting the world’s agreed climate goals in the most cost-effective way while fostering growth requires countries to set a strong carbon price. That’s the key conclusion of the High-Level Commission on Carbon Prices, presented in a major report today in Berlin by Nobel Laureate Joseph Stiglitz (Columbia University, New York) and Nicholas Stern (London School of Economics), along with commission members Mari Pangestu (Former Minister of Trade, Indonesia, today at Columbia University) and Ottmar Edenhofer (Potsdam Institute for Climate Impact Research). The commission of 13 eminent economists from around the world has identified the range of prices on carbon needed to achieve the Paris Agreement’s climate stabilization goal. According to the scientists, the ambition should be reaching $40-$80 per tonne of CO2 by 2020 and $50-100 per tonne by 2030.

“The world’s transition to a low-carbon and climate-resilient economy is the story of growth for this century,” said the commission co-chairs Stiglitz and Stern. “We’re already seeing the potential that this transformation represents in terms of more innovation, greater resilience, more livable cities, improved air quality and better health. Our report builds on the growing understanding of the opportunities for carbon pricing, together with other policies, to drive the sustainable growth and poverty reduction which can deliver on the Paris Agreement and the Sustainable Development Goals.”

"Putting a price-tag on CO2 emissions means finally telling the truth"

"It is a dirty lie that CO2 emissions from fossil fuels have so far come with no cost - they cost us human health, damage to our climate, and billions of Dollars in subsidies worldwide", added the report's co-author Ottmar Edenhofer who besides being PIK's chief economist is also Director of the Mercator Research Institute on Global Commons and Climate Change and Professor at Technische Universität Berlin. "Putting a clear price-tag on CO2 emissions means finally telling the truth. Pricing CO2 is key to climate stabilization. It unleashes market forces that will punish coal use and incentivize clean innovation. And instead of being another burden for the poor it can even drive social justice if income from CO2 pricing is given back to the people, as they do in Canada."

"Around the world, pricing systems are being built up - from China to California in the US, and Europe can fix its emissions trading by introducing a minimum price," said Edenhofer. "We can make this work if we really want to."

Five months of deliberations, supported by the World Bank and France

The High Level Commission on Carbon Prices was established by the Carbon Pricing Leadership Coalition in late 2016. It was supported by the Government of France and the World Bank Group. In its five months of deliberations, the commissioners explored multiple lines of evidence to reach their conclusion on the level of carbon pricing that would be consistent with achieving the 2°C-or-below temperature objective of the Paris Agreement. They analyzed national mitigation and development pathways, technological roadmaps, and global integrated assessment.

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