Leaders from across government and business are sending a clear message to the world this week that climate change is a risk that cannot be ignored, and, importantly, that they are ready to work together to bring down emissions.
Seventy-three countries and 11 states and provinces – together responsible for 54 percent of global greenhouse gas emissions and 52 percent of GDP – joined 11 cities and over 1,000 businesses and investors in signaling their support for carbon pricing through a series of initiatives being announced at the UN Secretary-General’s Climate Leadership Summit on Tuesday.
The list includes countries like China and South Africa that are planning carbon pricing, as well as Russia and countries at high risk from climate change, like the Marshall Islands. It includes business ranging across industry, energy and transportation, and institutional investors with more than $24 trillion in assets.
[Update: The count rose during the Summit to 74 countries and 23 subnational jurisdictions with the additions of the Czech Republic and Lagos State].
This is a wake-up moment. Carbon pricing if expanded to this scale and then globally has the potential to bring down emissions in a way that supports clean energy and low-carbon growth while giving businesses the flexibility to innovate and find the most efficient choices.
“The science is clear. The economics are compelling. We are seeing a shift toward the economic architecture that will be necessary to avoid a 2-degree-warmer world, an architecture that supports green growth, jobs and competitiveness,” said World Bank Group Vice President and Special Envoy for Climate Change Rachel Kyte.
To move carbon pricing use and understanding forward, the World Bank Group, World Economic Forum, and We Mean Business Coalition announced that they would convene a carbon pricing leadership coalition with business and government leaders.
Pulling together for a global cause
Carbon pricing brings together two distinct groups that have each spoken in favor of climate action but rarely worked together to address climate change: governments, which have been testing carbon trading systems and carbon taxes, and businesses that have started setting internal “shadow” carbon prices to help guide decisions for a cleaner future.
On the government side, nearly 40 countries and more than 20 cities, states and provinces, from British Columbia to Tokyo, are demonstrating the benefits of carbon pricing or plan to start soon. China is the latest to begin testing the waters, with seven local pilot carbon markets that are helping the government plan for a national carbon trading system.
In the private sector, there is a wide belief among business leaders that carbon will be priced, and preparations are already underway in several companies. More than 150 large businesses are using internal carbon pricing in their decision-making, and more than 600 large companies see regulations creating new business opportunities, according to CDP’s latest corporate survey.
Working together, climate-smart policies can help businesses direct their investment decisions to clean solutions and can also provide greater transparency for investors who worry about stranded assets and resilience for the future.