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STATEMENT: New Alliance Makes Prospects for Global Carbon Pricing “Brighter”

WASHINGTON (October 19, 2015)— A group of heads of state, city and state leaders, and members of the private sector are urging countries and companies around the globe to put a price on carbon. The effort is part of the Carbon Pricing Panel, convened by the World Bank and International Monetary Fund. It includes German Chancellor Angela Merkel, Chilean President Michelle Bachelet, French President François Hollande, Ethiopian Prime Minister Hailemariam Desalegn, Philippines President Benigno Aquino III, Mexican President Enrique Peña Nieto, Governor Jerry Brown of California, and Mayor Eduardo Paes of Rio de Janeiro.

WRI has conducted extensive research on carbon pricing, including a carbon pricing handbook for U.S. policymakers.

Following is a statement from Dr. Andrew Steer, President & CEO, World Resources Institute:

“The drumbeat for carbon pricing is getting louder. With today’s announcement that heads of state and government officials will lead a political process, the prospects for carbon pricing are brighter.

“For nearly a century, we’ve understood that pricing negative externalities is a sensible way to incentivize solutions. Nowhere is this clearer than around greenhouse gas emissions that are driving climate change.

“Recent research from WRI and others shows that carbon pricing is an effective, market-based approach that provides flexibility to adapt to cleaner, low-carbon technologies. Effective carbon pricing can drive down emissions and provide a boost to the economy.

“Carbon taxes and trading regimes are crucial components in a suite of complementary policies that can speed the transition from a high-carbon, low-efficiency world to a low-carbon, high-efficiency one. These policies need to be aligned in order to be fully effective.

“The important thing is that carbon pricing mechanisms must be substantial and predictable to impact investment behavior. Today’s announcement, together with the principles of effective carbon pricing recently announced by the OECD and World Bank, can help accelerate this shift.

“While we should not expect that a climate agreement in Paris will in itself set a global price on carbon, a price on carbon would enable countries to fulfill their national commitments at the lowest cost. The good news is that many countries have already included carbon pricing in their national climate plans. This announcement should resonate at the climate talks in Paris and beyond.”

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For more analysis on carbon pricing, see WRI’s Putting a Price on Carbon Handbook and the New Climate Economy’s Implementing Effective Carbon Pricing.

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