Carbon Pricing Poised for Rapid Adoption, World Bank Says

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  • Portugal, South Africa adding carbon taxes through 2017
  • European Union seeks global accounting, market rules

Carbon-pricing mechanisms such as markets and taxes are set for “widespread and rapid” use in the years after the Paris climate talks as more nations are seen adopting them as incentives for cleaner energy, according to the World Bank.

Carbon taxes introduced in Portugal, South Africa and Chile through 2017 will see 38 systems govern about 12 percent of the world’s greenhouse-gas emissions, up from 5 percent in 2011, the bank said in its annual State and Trends of Carbon Pricing report.

“We are not asking people to walk around a blind corner anymore,” Rachel Kyte, a special climate envoy at the bank, said in a call with reporters on Friday before publication of the report.

More than 190 nations are meeting in Paris in December with the aim of agreeing to limits on heat-trapping pollution and keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit). The European Union, which manages the world’s biggest carbon market by traded volume, on Friday urged United Nations envoys to agree international carbon-market rules and emissions-accounting systems by 2017.

The bank isn’t advocating market systems that allow excessive speculation, a concern raised by the Catholic church in June, Kyte said.

“This is not about making a quick buck on the back of the poor in order to put a green invisibility cloak on yourself,” she said.

Carbon-pricing systems may work even if nations fail to adopt common accounting systems at the UN talks in December, said Grzegorz Peszko, the lead economist on climate change at the bank. Ratings agencies could assess national, regional or state systems and still allow trading.

Details of emissions-trading rules will probably be hammered out after the meeting in December than during it, Kyte said.

“You might not see detailed negotiation on the mechanics of future carbon pricing regimes in Paris,” she said. “I don’t think that is where it should be negotiated.”