Fighting global warming will necessarily require taxing carbon emissions, or setting a price on carbon pollution, the World Bank’s chief executive said Wednesday at a G7 environment meeting in Canada, AFP reports.
“We believe very strongly that we can send an economic signal by introducing a shadow price for carbon,” Kristalina Georgieva told AFP, referring to a method of calculating a price per tonne of carbon that includes the social costs of pollution.
“We are the last generation that can do something to fight climate change but we are also the first generation that has to live with its consequences,” she said.
“There is a consensus among scientists and economists that carbon pricing is the best way to signal to economies that the behaviour has to change.”
According to the Institute for Climate Economics, 46 countries and 26 subnational governments have established a carbon pricing policy as of 1 April, either using a carbon tax or a carbon market in which quotas are set for big polluters who then have the option to buy or sell credits from other companies.
These policies added US$30 billion to government coffers, with prices per tonne ranging from US$1 to US$133.
But, according to the OECD, the amount being charged is insufficient to meet climate targets.
The World Bank is “making every major step to integrate climate action into all of our lending policies,” Georgieva commented.
One week after UN Secretary General Antonio Guterres warned that the world has only two years left to act in order to avert disastrous consequences of runaway climate change, Georgieva added her voice to the call to arms, saying it was “critical” that nations take action now.
The gathering of the Group of Seven industrialized nations along with the EU in the Canadian port city of Halifax is looking also to adopt new international rules to stop plastics from further accumulating in the world’s oceans.