The Managing Director of the International Monetary Fund (IMF) today proposed that G20 countries, the largest emitters of greenhouse gases, be charged a “robust” floor price for carbon emissions to help the transition to a sustainable economy.
“Because of the urgency to act, we propose an international minimum price for carbon among major emitters, such as the G20,” Kristalina Georgieva said in her participation in the Leaders’ Climate Summit, a virtual conference hosted by the US, attended by 40 world leaders.
The IMF director underlined that the measure “gives a fundamental signal to markets” that allows investments in renewable energy, electric mobility and reforestation, among others, to move forward.
“Without a robust price on carbon we will not be able to achieve our stabilisation objectives” within the Paris Agreement, she warned.
Georgieva noted that the average price of carbon is currently two dollars (about 1.67 euros at the current exchange rate) per tonne, but IMF analysis points to a need for the price to reach 75 dollars (62.45 euros) per tonne by 2030 to curb greenhouse gas emissions.
The resulting revenue could help underpin a “just transition that compensates households for price increases and facilitates companies and workers to transition from high to low carbon-intensive activities,” she said.
Georgieva also stressed that the minimum price should be “pragmatic and equitable, with different levels for countries” depending on their levels of economic development.
US President Joe Biden has invited 40 world leaders to a summit to pave the way for this year’s UN climate summit in Glasgow (COP26).
Biden has already pledged to cut US greenhouse gas emissions by half by 2030, with the aim of achieving carbon neutrality by 2050.
Russian President Vladimir Putin called for international cooperation in the fight against climate change; Chinese President Xi Jinping called for respect for multilateralism and differentiated responsibilities for countries according to their economic prosperity; French President Emmanuel Mácron called for greater speed in implementing the Paris Agreement; and German Chancellor Angela Merkel said the country will continue to do its part in defending the climate.
Among the Portuguese-speaking countries, Brazil has committed to stop deforestation and achieve carbon neutrality by 2050.
