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World Bank Urges CO2 Price

World Bank President Jim Yong Kim has urged the world’s environmental ministers to combat climate change by implementing a five-point plan that includes putting a price on carbon dioxide emissions, improving agricultural practices and ending fossil fuel subsidies.

Kim urged more countries to roll out price mechanisms either through a tax on carbon, indirect taxation, regulation or creation of a carbon market, Reuters reports.

The plan also includes building low-carbon cities and sharing new technology that will save energy, Kim told about 30 of the world’s energy and environment ministers gathered in Berlin for informal talks on a new global climate deal to take effect in 2020.

The Berlin gathering follows a meeting in Bonn last week of more than 600 government officials and NGOs who met t0 discuss a new global climate deal due to be signed in 2015 to succeed the current Kyoto Protocol, according to Reuters. US negotiators pushed nations to scrap coal, gas and oil subsidies by 2020, a step they said could cut emissions 10 percent under business-as-usual levels by mid-century.

The European Union Emissions Trading Scheme, the largest global carbon market, has struggled over the past year suffering from record low prices that analysts say could inch closer to zero unless policymakers take action, either through backloading or some form of long-term structural change. Carbon prices hit their lowest point April 16 after the European Parliament rejected an emergency plan to boost the ailing EU carbon market.

European carbon prices did rebound last week after German Chancellor Angela Merkel said the EU should take action on a plan to postpone the supply of permits.

California’s carbon auction has fared better. Earlier this year, California raised about $176 million selling GHG emissions permits in its second carbon auction, with businesses paying $13.62 per metric ton of carbon, exceeding analysts’ expectations and selling at $2.91 above the reserve price. The Feb. 19 auction sold a little over half as many allowances with a reserve price set 71 cents higher. The price increase is in line with California cap-and-trade regulations, which say that the auction reserve should increase annually by 5 percent plus the rate of inflation.

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3 thoughts on “World Bank Urges CO2 Price

  1. Carbon taxes are passed on to the customer, putting more customers on welfare, section 8 housing, and food stamps. As companies cut costs, they cut employee count, putting more able bodied people on unemployment and welfare.
    Record cold temps speak loudly against any “global warming” due to CO2.
    So, this new tax scheme helps us how?

  2. Try to keep up CO2 Good. Its not so much about ‘Global warming’ any more but ‘Climate Change’ meaning a swing to more extreme and unexpected weather events that include unusual cold snaps that affect crops and hence markets. Cold snaps in the northern hemisphere suggest that warm ocean current upwellings that keep those regions warm are slowing down due to the oceans warming in general and ocean cycling decreasing. This is combined with the ocean becoming less salty due to fresh water icemelt from the poles entering the ocean. This also sits with the information that air temperatures have not risen dramatically yet because the ice sheets have been absorbing the extra heat and melting. Once they are gone and no longer reflect the suns energy back to space, we can expect a double whammy and dramatically increased warming, with nothing to absorb it.
    Just because companies are too unscrupulous to to cut high management wages, and executive bonuses and payouts, but instead choose to put people off work, this does not mean a price on carbon is bad. If they could also legislate that companies have to absorb the costs by becoming more efficient or cutting wages across the board instead of laying people off (a preference of most people who are sacked I am sure)or passing costs on to consumers, then the carbon tax system would work. Unfortunately it just increasingly proves what we have known all along. Companies don’t care about their workers, just their bottom line.

  3. The other important point to make is that some markets are struggling with carbon prices because its not a level playing field. Some are having to pay the carbon price so cannot compete with those who are not. If the whole world introduced carbon pricing (the point of this article), then it would be a more level playing field.

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