Carbon pricing should cover 50% of global emissions by 2030, the leaders of Canada, Germany, France, Ethiopia, Mexico and Chile recommend.
The heads of state challenged fellow governments to expand global carbon markets to cover 25% of emissions by the end of this decade in a statement supported by the World Bank, IMF and OECD.
Currently around 12% of global carbon emissions are covered by a variety of carbon markets and taxes, according to the International Carbon Action Partnership 2016 status report.
“We need to make carbon pricing levels consistent with the Paris Agreement objective, to broaden the scope of covered emissions and to initiate the convergence of carbon pricing schemes,” France president Francois Hollande said in a statement.
California governor Jerry Brown and Rio de Janeiro mayor Eduardo Paes are among signatories to the proposal, released a day before over 150 nations will sign the Paris Agreement on climate change in New York.
Canada plans to expand its carbon pricing measures, said prime minister Justin Trudeau, which cover around 85% of the population due to a network of provincial systems.
“With a price for carbon and a global carbon market, we can achieve our common goal – staying well below the 2 degree ceiling – in such a way that is technology neutral, promoting innovation, market based and thus cost efficient,” added German chancellor Angela Merkel.
Striking a note of caution, OECD chief Angel Gurria warned that pricing alone would not be enough to tackle rising greenhouse gas emissions, which scientists say need to peak early next decade to ensure a chance of avoiding dangerous warming.
“Some of the most polluting fuels, such as coal, are often taxed at the lowest rates. Almost 800 spending programs and tax breaks are still used by OECD and major partner countries to encourage the production or use of fossil fuels,” he said.
The EU currently runs the world’s largest carbon market, although a glut of credits and generous allocations to heavy industry mean costs for polluters remain low. China plans to open a national market in 2017.