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Opinion / Op-Ed Contributors

Path to carbon pricing for a green world

By Jim Yong Kim & Christine Lagarde (China Daily) Updated: 2015-11-23 08:37

The World Bank Group is supporting countries and businesses as they develop climate-friendly public policies, invest in carbon markets and explore financial innovations to ease into low-carbon transitions. The group is leveraging its experience and global reach for learning and knowledge exchange through programs like the Partnership for Market Readiness.

From that experience, we have developed, alongside the Organization for Economic Cooperation and Development, initial principles to help guide and inspire future carbon-pricing schemes. By drawing on these principles, countries, regions, states and businesses can move faster to tackle the climate challenge confronting us all. The principles are based on fairness, alignment of policies and objectives, stability and predictability, transparency, efficiency and cost-effectiveness, and reliability and environmental integrity.

To help achieve our climate objectives, we need to promote dialogue on the necessary policy measures before and beyond the Paris climate conference. That is why we are announcing a "Carbon Pricing Panel", which will bring together heads of state and government, provincial and city leaders, and representatives of top companies to urge countries and businesses around the world to put a price on carbon.

Carbon pricing policies are already being implemented by some 40 national governments, including that of China, and 23 cities, provinces and regions that are putting a price on carbon. Many other governments also are reforming energy prices, and more than 400 companies report using a voluntary, internal carbon price. That makes sense. Top companies must effectively manage exposure to climate risk in order to generate higher profits and ensure more stable earnings.

All of these actions are welcome, but we view them as being only initial steps. Together with the leaders of the Carbon Pricing Panel, we call on governments to seize the moment - for the sake of the planet and future generations - to put a price on carbon pollution that reflects the environmental damage it causes. We stand ready to support governments that act. The longer we wait, the costlier and more difficult it will be for us - and our children and grandchildren - to protect the planet.

Jim Yong Kim is president of the World Bank Group, and Christine Lagarde is managing director of the International Monetary Fund.

Project Syndicate

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