Carbon Pricing Leadership Coalition at COP22
The Carbon Pricing Leadership Coalition (CPLC), a World Bank Group led initiative, is positioning as the convener of governments, businesses and civil society around carbon pricing. After successfully launching at COP21 in Paris in 2015, this year, the coalition hosted again a high-level event that brought to light stories of leadership and action, along with new ambition to address climate change.
In a packed room, attendees to the Carbon Pricing: Driving Ambition and Action event that took place on November 15 at the International Emissions Trading Association’s (IETA) business pavilion witnessed significant announcements such as the newly minted High-level Economic Commission and New Zealand’s declaration to join CPLC along with success stories of climate leadership.
The High-level Economic Commission
The High-level Economic Commission will be chaired by Joseph E. Stiglitz and Lord Nicholas Stern. Stiglitz is a Nobel-prize winning economist, professor at Columbia University, and the chief economist at the Roosevelt Institute. He was senior vice president and chief economist of the World Bank and lead author of the 1995 Report of the Intergovernmental Panel on Climate Change, which shared the 2007 Nobel Peace Prize.
Lord Stern is the author of the seminal 2006 Review on the Economics of Climate Change, one of the most influential papers discussing the real economic implications of addressing (or not addressing) climate. The former Chief Economist at the World Bank, Lord Nicholas is now the IG Patel Professor of Economics and Government at the London School of Economics and Chairman of the Grantham Research Institute on Climate Change and the Environment.
The co-chairs will work in collaboration with economists, and specialist on climate change and energy from all over the world. Their work will help countries achieve the targets of the Paris Agreement and get on a 2°C pathway. The Commission’s work will contribute to a vision of how the world can collectively decarbonize economies and will release their findings at the CPLC High-Level Assembly in April during the World Bank Group and International Monetary Fund Spring Meetings in 2017.
New Zealand joins CPLC
Last year in Paris, New Zealand led a Ministerial Declaration on Carbon Markets that was endorsed by 17 other countries. This Declaration highlights the important role that international market mechanisms will play in enhancing mitigation ambition and facilitating the delivery of mitigation contributions under the Paris Agreement. On Tuesday, New Zealand reaffirmed their commitment and by joining the CPLC demonstrated that the country is effectively leading the carbon pricing agenda.
Developing economies lead on carbon pricing
India’s private sector emerges as a leader in carbon pricing. Ajay Mathur, Director General from TERI, an Indian think tank dedicated to conducting research for sustainable development, and Mahendra Singhi, CEO of Dalmia Cement brought to notice corporate-India’s leadership. Just last month, TERI launched, Valuation of Energy Costs in the Indian Context, a report assessing India’s private sector’s preparedness in undertaking internal carbon pricing and already companies like Mahindra are publicly announcing their internal carbon pricing initiatives. Carbon pricing momentum is definitely growing in India as Mr. Singhi, CEO to India’s largest and the world’s greenest cement company shared their success with an internal carbon price of US $11 per ton of carbon emitted, which will allow them to become the first cement company to operate 100% renewable - all while achieving world’s highest growth.
From the other side of the world, Chile shared their vision on how they are moving the agenda: by embedding the carbon price with other pollutant taxes they are strategically combining long term goals on climate with short term benefits on health and environment and gaining political support along the way. Chile is also a regional leader looking to increase collaboration on carbon markets by, among others, taking advantage of the relationships within the Pacific Alliance Summit.
Carbon pricing is gaining momentum all over South America, as evidenced by the leadership displayed by the private sector. In Brazil, companies such as Braskem, and CPFL joined a group of over 100 companies led by CPD, ETHOS Institute, UN Global Compact in urging Brazil to “establish a carbon pricing methodology that is appropriate to Brazil’s economic characteristics and greenhouse gas emission (GHG) profile to incentivize investments in processes with low carbon intensity and ensure Brazilian competitiveness.”
A year of CPLC and what’s to come
Other interventions highlighted the work done by the CPLC thus far: Dr. Stephen Lucas, Senior Associate Deputy Minister (Climate Change) from Canada’s Environment Ministry highlighted the role of the FASTER Principles in Canada’s Pan-Canadian carbon pricing plan and Dirk Forrister from IETA gave CPLC credit for helping to get Article 6 into the Paris Agreement by giving voice to business and governments supporting carbon pricing and allowing negotiators to hear those voices.
Finally, Sergey Chestnoy, from Rusal, a Russian company leading in carbon pricing, announced the first Public-Private Sector Dialogue on Carbon Pricing in Russia taking place in December. This Dialogue will provide Russian government officials, business executives and leaders from civil society with the opportunity to explore, assess and discuss various policy options with their international peers.
Some additional interventions pointed to areas where work will need to be done in the upcoming months: increase support of sub-national ambition and continue mobilizing business support. Join us next year at CPLC's High Level Assembly meeting in Washington, DC, to meet other carbon pricing leaders and work together through the dissemination of good practice, exchange of experiences and partnerships.