Triumvirate of world leaders says carbon pricing can spur economies
Joined by World Bank President Jim Yong Kim and U.N. Secretary-General Ban Ki-moon as they prepared to speak to a gathering of 46 finance ministers on the economics of fighting global warming, Lagarde advocated both a tax on carbon and the elimination of fossil fuel subsidies.
“The protection of ecology is an imperative,” she said. “Everybody says it’s mostly physical … [but] dealing with the protection of ecology can be mostly fiscal.” By getting prices right and spurring investment in low-carbon technology, she said, “you can do well for the economy.”
The comments came as the world’s financial heavyweights descended on Washington, D.C., for a week of biannual World Bank meetings. Kim, who has made attacking climate change and ending extreme poverty a joint goal for the institution, said governments must act fast. He called the appearance of the U.N. chief along with the heads of the world’s top financial and development agencies a message for political leaders.
“We are here altogether because we know the world needs to fight climate change with much, much more seriousness,” Kim said. “Despite the fact that it is controversial, we have to tackle the issue of carbon pricing.”
Nearly 200 nations including the United States are expected to sign a new global agreement in Paris in 2015 to ratchet down greenhouse gases. This year, though, is when leaders say much of the heavy lifting for the agreement will have to take place. Many government are already in the midst of determining what new carbon-cutting pledges they plan to make for the coming decade, and U.N. officials are leaning on world leaders to pony up more money to help vulnerable communities.
Inside the closed-door, high-level meeting, the discussion on carbon pricing was “noncontroversial,” said World Bank Special Envoy for Climate Change Rachel Kyte.
“It was practical. It was ‘this was how we did it,'” Kyte said after the session. “A lot of countries are moving quite quickly to make sure there is an effective price on carbon, and they’re doing it in different ways.”
The meeting included finance ministers, foreign secretaries and environment ministers from major emitters like the U.S., China and India to vulnerable countries like Bangladesh and Angola. Leaders from France as well as Peru, the country hosting a critical round of U.N. climate negotiations in December, were also present.
In September the U.N. will host a climate change summit parallel to the 69th General Assembly meetings.
Speaking to ministers, Ban said he is “counting on” them to capitalize the Green Climate Fund. The fund aims to deliver $100 billion annually by 2020 but remains mostly an empty shell.
“Financing is the key to achieving a universal legal climate agreement in 2015,” Ban added, according to a statement provided by his office. He called private investment critical but unlikely to materialize without the catalyst of public aid.
“Public policy must pave the way,” he said. “I have been meeting during the last two or three years many business leaders, including from pension funds and the business community. And all business leaders say they are ready to finance a green economy but they need clear direction and predictable policies from governments.”
He called specifically for global finance ministers and private investors to meet in the coming months and “pave the way for a common approach,” and he told fiscal leaders, “I count on everyone here to deliver.”