Without a price, recognizing and charging for the damaging effects of emitting greenhouse gases, efforts to address climate change will be inefficient and likely too slow to avoid its worst effects.
Pricing carbon is “not the only thing, but a necessary thing,” said Rachel Kyte, Special Envoy for Climate Change, World Bank Group.
“We have to take carbon pollution out of our growth model,” she said. That entails “energy policy reform, energy subsidy reform and putting a price on carbon.”
China has seven pilot emissions trading systems, and has announced its intention to launch a national system in 2017.
Qimin Chai, a deputy director in China’s National Center for Climate Change Strategy and International Cooperation, said it is key to “count the benefits and the costs” of action on climate change, explaining how emissions trading systems can spur development and stimulate economies through recycling of investment, if the price is high enough.
Countries and constituencies need to “make pricing integral, and build on it,” explained David Heurtel, the Development, Environment and Climate Change Minister in the province of Québec, Canada.
Québec launched an emissions cap and trade system in 2013 and linked it with the emissions trading system in California, U.S.A., a year later. The Canadian provinces of Ontario and Manitoba have since announced their intentions to cap and trade their emissions. One province, British Columbia, has had a carbon tax for several years, and another province, Alberta, is planning one.
Québec started with a low carbon dioxide price per tonne, which has steadily risen. The gradual transition has worked well, avoiding economic dampening. Business has integrated the cost and the province has reinvested the income, explained Mr. Heurtel.
Bruno Lafont, Co-Chair of the LafargeHolcim cement company, said he was in favour of global carbon pricing, stressing the word global. With some constituencies subject to a price and others not, competition could be uneven.
Businesses need “stability and predictability” and any pricing system needs to avoid “distortion of competition,” Mr. Lafont said.