The CPLC is a coalition led by the World Bank Group and the International Monetary Fund, which promotes carbon pricing. The coalition consists of 32 national and sub-national governments, 150 leading businesses and 67 strategic partners, including the CLC. The main task of the coalition is to promote the introduction of carbon pricing globally. The coalition is chaired by Catherine McKenna, Canadian Minister of Environment and Climate Change, and Gerard Mestrallet, Chairman of the Board of Directors at the Engie Group.
When the CPLC started its operations in 2014, 40 countries and 20 sub-national governments applied carbon pricing, and carbon pricing covered 12% of global greenhouse gas emissions. At the beginning of 2018, carbon pricing covered 15% of global greenhouse gas emissions, and the proportion is expected to rise to 20-25% over the next few years. Eight new carbon pricing projects have been launched since 2014, in China, South Africa, Colombia, Chile, Korea and Ontario, amongst others. In addition, approximately 1,400 companies now use internal carbon pricing to develop their business operations. The coalition aims to have 50% of global greenhouse gas emissions covered by carbon pricing by 2030.
In addition to the coverage of carbon pricing, another challenge is the effectiveness of pricing. Although some implementations have already produced significant results – for example, in England, where the production of coal power has fallen by 75% in three years due to the impact of the Carbon Floor Price in emissions trading – the price is adequate in only a small portion of the systems in terms of the Paris Climate Agreement.
Participants in the meeting had been asked to come forward with suggestions on how communications could be developed regarding the expansion of carbon pricing and how to reduce the concerns of companies operating in the international market when carbon prices are at different levels in different countries or regions.
“We must act quickly”, says Jorma Ollila
Jorma Ollila took the floor on behalf of the CLC at the meeting. Regarding the development of communications, Ollila noted that, above all, there is room for improvement in impact assessments – how different carbon pricing solutions have reduced emissions and created low-carbon investments. Seeing is believing. A lot of publications have been made on the subject, but there are no good estimates of the impact.
Ollila proposed a new project to the CPLC to explore and plan how carbon pricing could accelerate forestation projects and more efficient use of forests in climate change mitigation. The role of forests and products derived from forests will become increasingly important as carbon sinks and carbon storages, and as biomaterials replace materials with a larger carbon footprint such as concrete, steel and plastics.
“The meeting showed that there is still a lot to be done in terms of carbon pricing and we must act quickly. To achieve the objectives of the Paris Agreement requires us to quickly get the carbon price to such a level as to really make a difference,” says Ollila.
At the meeting, Finland was represented by Petteri Orpo, Minister of Finance. In his speech, the minister emphasised the urgency of climate change mitigation and the central role of ministers of finance in changing the world economy to low carbon. Finland has all the prerequisites to be a positive example and a trendsetter in the matter. This year, Minister Orpo intends to work actively, both at the EU and international level, to promote carbon pricing as an effective tool for climate policy. Finland will chair the World Bank and IMF annual meeting in Bali this autumn.
The meeting was also attended by CLC Chairman Henrik Ehrnrooth. “It was great to see that although our coalition is still young, we are already valued in this global forum. Through our expertise and networks, we can have a significant impact on promoting global carbon pricing, and we have already decided to make the development of this issue our key project,” says Ehrnrooth.
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