COP21: Businesses join governments to push for carbon pricing

30th November 2015

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Ninety businesses and 19 governments have signed up to a World Bank coalition to support the introduction of carbon prices as the UNFCCC climate change negotiations opened in Paris.

BT Group, EDF, Lafarge, Nestlé, SSE, Unilever and Veolia are among the companies joining the coalition, which will collect and share best practice, mobilise business support and convene talks with global leaders to overcome barriers to more widespread use of carbon pricing.

They are backed by the governments of Sweden, the Netherlands, Ethiopia and Mexico, among others. Canadian environment minister Catherine McKenna announced that the country's government, elected last month, would support the coalition.

Rachel Kyte, World Bank vice president and special envoy on climate change, said support for carbon pricing had risen significantly worldwide. "Eighteen months ago, everyone knew carbon pricing was a building block, an essential if insufficient way of dealing with climate change, but it wasn't really on the agenda. Over the past year we have built a coalition and looked at what works around the world," she said.

World Bank president Jim Yong Kim pointed to China's plans to introduce a carbon price in 2017, and said: "Anyone who wants to do business with China will have to change the way they work."

Angel Gurria, secretary general of the OECD, said that many countries now had a price on carbon, but that it was important for these schemes to converge. A "big fat tax" would be the easiest and quickest way to introduce carbon pricing, rather than emissions trading schemes such as Europe's, which many have criticised for failing to set a sufficiently high price of carbon, he said.

Carbon pricing has been supported by several high-level businesses and organisations. The New Climate Economy concluded in a report published in October that not only does carbon pricing work, but it does not harm the economies of those countries that introduce it.

Carbon pricing is also backed by WWF. Marco Lambertini, director of WWF International, said the organisation was acting as "critical friend" to the coalition. "Carbon pricing cannot work in isolation. It has to be supported by very ambitious carbon reduction policies and guarantee a sufficiently high price, strongly linked to these policies," he said.

About 40 nations and 23 cities, states and regions have implemented or have plans to put a price on carbon, with programmes and mechanisms covering about 12% of global greenhouse-gas emissions, according to the World Bank.

Meanwhile, world leaders made their speeches to delegates as COP21 officially opened. UK prime minister David Cameron said: "Instead of making excuses tomorrow to our children and grandchildren, we should be taking action against climate change today. It is not difficult, it is doable, so we should come together and do it."

His speech was slammed by UK environmental campaign groups. They pointed to the Conservative government's dismantling of renewable energy subsidies, and the scrapping of zero carbon homes and the carbon capture and storage competition as evidence that the government is not practicing what it is preaching.

Matthew Spencer, director of think tank the Green Alliance said: "It's a great shame that he doesn't talk about his determination to tackle climate change when he is on British soil. It's his reticence to give his cabinet clear marching orders on climate change which explains the growing gap between the UK's international leadership and declining business confidence in UK low carbon policy."

Back in the UK, chancellor George Osborne today announced a blueprint on plans he said would reduce consumer bills and boost business. Proposals include his pledge to reduce energy bills by £30 a year from 2017 by reducing green policies impacting energy bills. Most of these savings are due to be made by almost halving investment under the Energy Company Obligation, which obliges energy companies to install energy efficiency measures in homes, according to E3G.

Other announcements on the first day of the Paris talks:

  • $248 million for adaptation support to the most vulnerable countries under the least developed countries fund (LDCF). Donors include the UK, which pledged $45 million (£30 million), Canada, Denmark, Finland, France, Germany, Ireland, Italy, Sweden, Switzerland and the US.
  • A coalition of almost 40 governments, hundreds of businesses and organisations calling for accelerated action on phasing out fossil fuel subsidies. New Zealand prime minister John Key formally presented the fossil fuel subsidy reform communiqué to Christiana Figueres, executive secretary of the UN Framework Convention on Climate Change (UNFCCC), on behalf of the Friends of Fossil Fuel Subsidy Reform, and the Prince of Wales's Corporate Leaders Group. An estimated $500 billion is spent globally each year on subsidies that keep the price of oil, gas and coal artificially low, according to the coalition. However, Key's pledge was ridiculed by campaign group Climate Action Network, which said that fossil fuel production subsidies in New Zealand have increased seven-fold since the prime minister's election in 2008.
  • Indian prime minister Narendra Modi launched an international solar alliance consisting of more than 120 countries, including COP21 hosts France. The Indian government is investing $30m (£20m) in setting up the headquarters of the so-called International Agency for Solar Technologies and Applications (Iasta) in India. The alliance is hoping to raise $400 million from membership fees and international agencies to aid other countries with solar technology and policy. Companies involved in the project include Areva, Engie, Enel, HSBC France and Tata Steel.
  • A campaign for the Paris talks to focus on keeping global temperature rises to below 1.5C, rather than the current target of 2C. This was announced by the president of the Philippines, Benigo Aquino III, with the Climate Vulnerable Forum, which consists of countries most at risk from climate change.

IEMA has been running a climate change campaign, #IEMANoCOPOut.

Over the course of the campaign, there has been a three-fold growth in the number of members in the climate change and energy network, which now has 754 members.

Read Tim Balcon's campaign blog here.


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