Carbon Pricing Is Key to Delivering Global Emissions Cuts, IMF Says
An International Monetary Fund report says a carbon price can anchor policies that tackle climate change without ballooning national debt.
A coal-fired power plant in Peitz, Germany.
Photographer: Krisztian Bocsi/BloombergHigher temperatures and more intense storms haven’t changed the fundamental challenge of climate policy: Countries around the world must find politically feasible ways to zero out emissions without taking on crushing loads of debt.
The latest edition of the International Monetary Fund’s semiannual Fiscal Monitor calls that quandary a “trilemma.” It can be solved, the authors argue, through targeted policies anchored in some version of carbon pricing, traditionally economists’ preferred tool. The report comes in advance of the IMF’s annual meeting, to be held this month in Marrakech, Morocco.