COP23 Roundtable explores how carbon pricing can build value across societies
The Carbon Pricing Leadership Coalition (CPLC) held a high-level roundtable event in Bonn, on Finance Day at the COP23. The meeting was an important opportunity for the Coalition membership to share views, provide updates on new and emerging efforts, and discuss ways to intensify the market signal sent by existing policies.
- Côte d’Ivoire sent a large delegation, to listen, to meet partners, and to offer views from a developing country perspective. The delegation was led by Anne-Désirée Ouloto, Minister of Sanitation, Environment and Sustainable Development.
- Burkina Faso was represented by Her Royal Highness Princess Abze Djigma, Special Envoy of the President of Burkina Faso for the SDGs and Climate Change.
- CPLC High-Level Assembly co-chair Environment Minister Catherine McKenna, of Canada, expressed her government’s commitment to nationwide carbon pricing, and called for collaboration between countries to align pricing models across borders.
- Feike Sijbesma, CEO of Royal DSM and the other co-chair of the High-Level Assembly, said the world is not moving fast enough to fulfill the goals of the Paris Agreement. Carbon pricing will speed up and spread the required action, he added.
Laura Tuck, World Bank Vice President for Sustainable Development, cited the Stiglitz/Stern High-Level Commission report, which found we need to broaden coverage, strengthen prices, and also align complementary policies to optimize the acceleration of action. She added that the Coalition can be of great value in making the business case for carbon pricing more self-evident, while considering legitimate sector and stakeholder concerns.
Min. Ouloto said carbon pricing must be part of her nation’s engagement with the global effort to solve climate change. Côte d’Ivoire wants to make sure its economic future is not constrained by an outdated structural commitment to burning fossil fuels. She also said the country is working to sensitize industry and local government to the benefits of pricing carbon.
Several partners raised the issue of civil society support. I had the privilege of announcing to the room that the very next day, in Washington, DC , more than 500 citizen volunteers would be going to scheduled meetings with their representatives in the United States Congress, to advocate for a nationwide carbon fee and dividend.
There was applause for this news. It was clear that citizen participation breathes life into the political push for carbon pricing. I added that for Citizens’ Climate Lobby, what is critical is that citizens and stakeholders be empowered to speak for their own interest, with always available and updated education on how the policies under consideration affect their local condition and national economy.
The single most frequent concern Coalition members have tended to hear from leaders in government or business is that higher prices for carbon-based energy could make their market, or their business, less competitive. A number of points were raised to address this concern:
- This fear assumes the hidden externalized costs from burning carbon fuels is not putting a drag on overall economic activity. (Analysis shows they are.)
- Areas of concern for energy-intensive trade exposed industries can be addressed at the border, in bilateral negotiations, or in the policy design phase, especially by pricing upstream for easier economy-wide coverage.
- Carbon pricing done right makes an entire economy more efficient at generating new wealth from any given $1 of investment.
- 2017 has seen the clear and present fiscal risk from inaction on climate change, with nearly $400 billion in estimated extreme weather damages in the US alone (1/3 of the total amount spent from 1980 through 2012).
- Reducing risk is a major imperative, not only for the public sector, but for economies as a whole, and for all actors in finance or business.
To address competitiveness questions in national and individual cases, a number of Coalition partners, myself included, recommended a new High-Level Commission report. The report could be published at the time of the 3rd High-Level Assembly of the CPLC, in April 2018, and could explore:
- Competitiveness issues for specific sectors;
- Competitiveness issues for nations, with relation to trade;
- Known good practices for reducing any impact on sectoral or national competitiveness, without reducing environmental effectiveness;
- Measurable gains in economic efficiency due to carbon pricing;
- Estimated costs from the negative externalities associated with burning carbon-emitting fuels;
- Drag and inefficiency linked to excess subsidies and unchecked risk (geophysical, market-related, and transition-related);
- A menu of optimized trajectories for jurisdictions looking to deal with specific risks and market concerns.
John Roome concluded the meeting with 10 takeaways the Coalition could take forward to the next High-Level Assembly, in April. These included the role of informed, inclusive advocacy, the need for flexibility in cooperation between jurisdictions, and for further examination of how the uses of revenues can provide added incentive for strong carbon pricing.