Five international organizations have released a significant report detailing potential coordinated approaches to climate action, carbon pricing, and the cross-border effects of climate change mitigation policies. The report was presented by the Joint Task Force on Climate Action, Carbon Pricing, and Policy Spillovers, convened by the World Trade Organization (WTO) and joined by the International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), United Nations Conference on Trade and Development (UNCTAD), and the World Bank.
Titled "Working Together for Better Climate Action: Carbon Pricing, Policy Spillovers, and Global Climate Goals," the report arrives as countries worldwide increase efforts to address climate change. Currently, 75 carbon taxes and emission trading schemes are in effect globally, covering approximately 24 percent of global emissions.
The report emphasizes that increased climate action is necessary to meet global emission reduction targets while contributing to broader development goals. It makes four significant contributions:
1. Providing a common understanding of carbon pricing metrics to improve transparency in shifting incentives for decarbonization.
2. Examining climate change mitigation policies' composition, highlighting carbon pricing as a cost-effective instrument that raises revenues.
3. Outlining how international organizations can support policy coordination to foster positive and limit negative cross-border spillovers from climate change mitigation policies.
4. Demonstrating how coordination can scale up climate action by closing transparency, implementation, and ambition gaps.
WTO Director-General Ngozi Okonjo-Iweala noted that "trade-related climate policies are on the rise," which can lead to cross-border spillovers increasing trade tensions. She emphasized the need for future work focusing on ambitious carbon pricing policies' coordination.
IMF Managing Director Kristalina Georgieva stated that "carbon pricing should be an integral part of a well-designed policy mix," urging international coordination on mitigation action to unlock progress.
OECD Secretary-General Mathias Cormann highlighted the importance of aligning efforts for a global impact on achieving net-zero emissions through coherent and better-coordinated global mitigation policies.
UNCTAD Secretary-General Rebeca Grynspan stressed supporting developing countries in crafting appropriate policy mixes for climate mitigation while minimizing negative spillovers on these economies.
World Bank Senior Managing Director Axel van Trotsenburg pointed out that carbon pricing could play a central role in tailoring climate policies suitable for each country's context while emphasizing cooperation and coordination among countries introducing their own climate policies.
The report is available online for further details.
For more information, contact Melissa Bryant at +1 202 891-9397 or mbryant@worldbankgroup.org