Just months after the Paris Agreement at COP21, and as many companies set programs to reduce carbon emissions in their manufacturing, the World Bank on Tuesday brought together over 30 developed and developing countries at the “Carbon Pricing: Sustaining the Momentum after COP21” conference in Zurich to take stock and discuss opportunities and challenges to use carbon pricing to reduce greenhouse gas emissions.
“In our view, putting a price on greenhouse gases is a prerequisite for reducing emissions in the most cost-efficient and effective way. An important means to this end is using market mechanisms, such as emission-trading systems, as well as tax schemes and offset mechanisms,” said Ivo Germann, head of operations for economic cooperation and development for the State Secretariat for Economic Affairs of Switzerland.
In the run-up to COP21, more than 185 countries submitted national proposals for climate action — the nationally determined contributions, which will be important drivers in their transition toward a low-carbon economy. Of these, 64 include positive statements on the use of carbon markets.
To achieve this, many governments have already begun to put a price on greenhouse gas emissions, and private companies are calling for widespread use of carbon pricing policies as a way to maintain competitiveness, create jobs and encourage innovation while reducing emissions.
The energy sector is by far the top producer of carbon emissions, as its creation and industrial and public use all contribute to more than 75 percent of greenhouse gasses. Agriculture and industrial processes are also smaller contributors.
In 2014, VF Corp., Levis Strauss & Co. and Nike Inc. were among 220 companies endorsing President Obama’s plan proposed by the Environmental Protection Agency to reduce carbon dioxide emissions at power plants in the next 15 years.
Coinciding with the December COP21 conference in Paris, Levi’s Chip Bergh and VF’s Eric Wiseman were among chief executive officers who called on government leaders to reach a strong climate change agreement that will stem emissions of greenhouse gases.
“We come together to acknowledge that climate change is harming the world in which we operate,” said the statement, also signed by executives from Gap Inc., Hennes & Mauritz, Eileen Fisher, Adidas Group and Burton Snowboards. The initiative was coordinated by the Boston-based nonprofit organization Ceres.
James Close, director in the World Bank’s Climate Change Group, commenting on Tuesday’s conference, said, “This event gives us a chance to talk about concrete actions that countries are pursuing, the challenges that lie ahead and ways that we support our clients to design and implement carbon pricing solutions that put countries and companies on a low-carbon development pathway.”
The Carbon Pricing Leadership Coalition, the Partnership for Market Readiness and the Networked Carbon Markets initiative — a set of complementary World Bank Group initiatives — are facilitating discussions on the growing momentum and concrete steps to advance carbon pricing, as well as the emergence and linking of global carbon markets to scale up emission reductions.
As an output of the World Bank’s efforts on carbon pricing, the Partnership for Market Readiness today published “Emissions Trading in Practice: A Handbook on Design and Implementation” jointly with the International Carbon Action Partnership. This handbook sets out a 10-step process, with a series of concrete decisions and actions to be taken, to assist countries with the design, implementation and operation of an effective ETS.