While we anxiously await the final outcome of COP28 here’s what IMF head Kristalina Georgieva said earlier about the obvious solution to finding the finance to decarbonise the world.
It has been estimated that developing countries will require $2 tn pa to decarbonise, mitigate and adapt (the IMF estimates the global economy is worth about $450 tn) but the IMF has calculated that fossil fuels are subsidised to the extent of $7 tn pa without taking the health costs of fossil fuel pollution into consideration. The IMF has consistently argued the need to put a price on carbon (as of 2021 26% of the world put a price on carbon), the logic of this was again put forward by Kristalina at the COP28 Finance and Trade day, (she also argued for regulation and replacing fossil fuel subsidies with renewable energy subsidies as an alternative approach).…..“We have been slow on a very important policy thought, which is the incentive for investors by still tolerating high levels of fossil-fuel subsidies,” she told the Guardian in an interview. “And [the world has made this worse] by being still fairly slow on introducing carbon pricing, and giving a trajectory for this carbon price upward.” ….. “The evidence is first it works,”. “When you put a price on carbon, decarbonisation accelerates. The Europeans introduced the emission trading scheme [in 2005] and they have been growing and yet emissions went down by 37%. You see the same thing in Canada with their carbon tax.”……“When we talk about the need to support the transition to the green economy, where the money could come from – well, here is the source,” .
It is also worth pointing out that those calling for future fossil fuel use to be abated by carbon capture and storage(CCS), will need a carbon price for CCS to be viable.