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July 24, 2014
World Bank Calls for Price on Carbon
    by Robert Kropp

Stating that the debate over pricing carbon has shifted from whether to how, the World Bank invites stakeholders to become signatories to a statement calling on governments to take action.


As reported on a couple of occasions at SocialFunds.com, the UN Secretary-General, acknowledging the urgency of global action on climate change, has called for nations to meet in New York in September for a Climate Summit.

Scheduled for one year before climate treaty negotiations are to resume in Paris, the Summit “is aimed at catalyzing action by governments, business, finance, industry, and civil society in areas for new commitments and substantial, scalable and replicable contributions to the Summit that will help the world shift toward a low-carbon economy,” according to the UN.

In advance of the summit, the World Bank Group is calling on nations and corporations to support a price of carbon; which, the World Bank states, is necessary as part of any plan to meaningfully address climate change.

“We are encouraging countries, sub-national jurisdictions, and companies to join a growing coalition of first movers to support putting a price on carbon,” said Rachel Kyte, World Bank Group vice president and special envoy for climate change. “A carbon price provides a necessary signal for investment in low-carbon and resilient growth and, regardless of the mechanism used, should be part of any package of policies to scale up mitigation.”

The World Bank has issued a statement, entitled Putting a Price on Carbon, and is inviting nations and corporations to become signatories.

“Greater international cooperation is essential,” according ro the statement. “Governments pledge to work with each other and companies pledge to work with governments towards the long-term objective of a carbon price applied throughout the global economy by strengthening carbon pricing policies to redirect investment commensurate with the scale of the climate challenge; bringing forward and strengthening the implementation of existing carbon pricing policies to better manage investment risks and opportunities; and enhancing cooperation to share information, expertise and lessons learned on developing and implementing carbon pricing through various 'readiness' platforms.”

US SIF – The Forum for Sustainable and Responsible Investment, a national network of sustainable investment organizations, has scheduled a webinar for July 30th in an effort to encourage its members to sign the statement. The World Bank's goal, according to US SIF, is to get 1,000 businesses worldwide to support the statement.

Political resistance to a price on carbon in the US, where many Republican congressmen persist in denying established climate science, has thus far made a legislative enactment of carbon pricing unlikely. But sub-national jurisdictions, such as the Regional Greenhouse Gas Initiative (RGGI) in the Northeast, have been operating successfully for years. “Investments of...auction proceeds to date are projected to return more than $2 billion in lifetime energy bill savings to more than 3 million participating households and more than 12,000 businesses in the region,” RGGI stated in a February report.

And according to a 2013 report from CDP, “many major publicly traded companies operating or based in the United States have integrated an 'internal carbon price' as a core element in their ongoing business strategies.”

“Most companies covered in this report state they expect an eventual regulatory approach in some form to address climate change,” the CDP report states. “Therefore, companies cite use of a carbon price as a planning tool to help identify revenue opportunities, risks, and as an incentive to drive maximum energy efficiencies to reduce costs and guide capital investment decisions.”

As an example of the aforementioned regulatory approach, the US Environmental Protection Agency (EPA) recently proposed guidelines that would, for the first time, limit emissions from existing power plants.

“The inability of Congress to enact legislation to curb the nation’s greenhouse gas emissions has made it imperative for the EPA to act, as failure by the United States and other major economies to reduce these dangerous pollutants will have catastrophic implications for current and succeeding generations,” Lisa Woll, CEO of US SIF, stated in response to the proposed guidelines. “The EPA’s proposal will help drive innovation, benefit US consumers and bolster international efforts to curb climate change. Sustainable and responsible investors welcome these developments and look forward to working to support the transition to a modern, low carbon economy.”

 

 
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