World Bank sees ‘momentum’ behind global carbon price

Top official Rachel Kyte says Australia’s decision to ditch carbon price won’t change international picture

By Ed King in Pori

Momentum is growing behind global efforts to develop a carbon price, despite Australia’s decision to scrap its tax on the country’s top polluters.

That is the view of the World Bank’s top climate official Rachel Kyte, addressing delegates at an environmental conference in Pori, Finland.

“The question I would ask if I was Australian was would I want to be in the Pacific when every one of my trading partners is on track to have an emissions trading scheme or an economy that prices carbon in within the next 2-3 years?” she said.

“My answer would be no.”

Last week Australia became the first country to scrap its flagship climate change policy, prime minister Tony Abbott citing high energy costs for consumers.

The decision means Canberra does not have a recognised plan to achieve its goal of cutting greenhouse gas emissions 5-25% on 2005 levels by 2020.

Despite this regression, Kyte said ‘like-minded’ countries and companies had started to realise cutting their carbon footprint made economic sense.

And she warned last week’s decision by Australia’s government to ditch its controversial carbon tax could have long-term impacts for its economy, given the way other major economies are heading.

Over 40 states and regions including the EU, some US states and China now operate a range of initiatives pricing pollution, with others in the pipeline.

Prices for a tonne of carbon currently vary, usually depending on the wealth and carbon intensity of an econ0my.

Last week India’s finance minister announced the country would double its levy on coal from RS50 to RS100 ($1.66), part of a ‘Clean Energy Cess’ aimed at financing and promoting clean energy initiatives.

“There is a momentum towards pricing carbon…get prices right and then drive clear signals to the private sector to invest where you want them to be,” she said.

“That means performance standards for efficiency for cars, buildings and appliances.”

“And for the developing world, put a trade system in place to allow them to be competitive, and provide them with the finance and tech that will allow them to follow a different trajectory than we did.”

Countries are currently negotiating the text for a global climate change agreement, set to be signed at a UN summit in Paris in December 2015.

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