Business calls for carbon pricing in Paris agreement

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Earth Journalism Network, Paris

Business sector is pushing to include carbon pricing mechanism in Paris agreement, yet it remains unclear whether market mechanism is still on the negotiation table.

Carbon pricing is an emerging market mechanism introduced by various countries in recent years as a market approach to climate mitigation. Through carbon trade, countries with higher carbon emissions could purchase emission permit from those with lower emissions or even negative emissions.

On November 30, 2015, heads of state from French, Canada, Chile, Ethiopia, Germany and Mexico and World Bank Group President Jim Yong Kim joined a high-level press conference to calling for actions to price carbon pollutants. On the same day, countries and companies joined together to establish Carbon Pricing Leadership Coalition (CPLC), aiming to facilitate global carbon trade.

John Roome, who is the senior director for Climate Change Group of the World Bank Group, said so far 15% of global carbon emissions has been covered by carbon pricing mechanism. Looking forward, he said he would like to see higher percentage of emission to be covered by such market mechanisms.

According to a new report published on World Bank Group on carbon pricing, by 2015, the number of implemented or planned carbon pricing schemes around the world has almost doubled since 2012. The market now worth about US$50 billion.

Markus Beyrer, director general of Business Europe, said the development of global carbon market would facilitate investments and innovations from private sectors to deliver cost-benefit solutions to climate change.

The trend is positive as private sectors are moving rapidly in line with political actions in city and state level. Figures from World Bank Group shows 39 countries and 23 cities, states and regions have or are going to put a price on carbon. In terms of business sector, more than 1000 companies across the world have committed or being practicing internal carbon pricing.

However, though countries like Chile, Korea, China and US are moving towards national carbon tax or emission trading system, the world is far away from forming a global carbon market.

“To put one national market is a step too soon and too quickly”, said John Roome. “In a short-term, we will not see one national carbon market.”

Dirk Forrister, chief executive of International Emissions Trading Association (IETA), said in a press conference today, “business is ready but are in need of a UN mechanism and signals from the policymakers.”