On Saturday G20 finance ministers endorsed carbon pricing for the first time as part of the tool bag needed to reduce emissions. Such tools include investing in sustainable infrastructure and new technologies to promote decarbonization and clean energy, “including the rationalisation and phasing-out of inefficient fossil fuel subsidies that encourage wasteful consumption and, if appropriate, the use of carbon pricing mechanisms and incentives, while providing targeted support for the poorest and the most vulnerable,”
On Sunday at the Venice International Conference on Climate, Christine Lagarde, president of the European Central Bank, emphasised the importance of an ‘effective carbon price that reflects the true cost of carbon’. William D.Nordhaus, American economist and Nobel laureate, gave the keynote address at the conference, calling for a ‘climate club’ of countries willing to commit to a carbon price…’It is a painful, painful realisation, but I think we need to face it: Our international climate policy, the approach we are taking, is at a dead end,‘ referring to the annual COP climate summits. This seems to me to be a tacit acknowledgement that the approach based on NDCs and carbon trading, enshrined in the ETS system, is not achieving the required results.
There was also further clarification of the announcement on UK carbon pricing made on Friday. The government had been due to publish its heat and building strategy next week but at a last minute meeting Boris Johnson was said to be concerned that it did not do enough to protect consumers and wanted further safeguards! The Heat and Buildings strategy has now been postponed until the autumn, perhaps they should have consulted Boris earlier.
In the Sunday Times, David Smith, the economics editor discussed a recent report by Office for Budget Responsibility (OBR): “The biggest increases in emissions in recent years, unsurprisingly, have been in China and India. This creates a political problem, rooted in the economics of net-zero. As the OBR puts it, the physical risks from global warming are “largely exogenous” – in other words, coming from outside this country – while the costs and risks are “endogenous”, to be borne at home. That is what makes it a challenge. It is one thing for the government to take on its share of the cost of decarbonisation, it is another to persuade the public to do so without very large incentives.”
We all need to seize the moment so the government doesn’t get cold feet – show them you endorse this sensible and just idea and history will approve. If you haven’t done so already do look at the campaign blog and get tweeting, emailing. FBing et al.