Ambassador for Climate Change, Deputy Minister for Foreign Affairs, Korea
Deputy Minister of the Department of Energy, South Africa
Senior Fellow, Brookings Institution
General Secretary, International Trade Union Confederation (ITUC)
Executive Secretary, UNFCCC
Head of Climate Change and GHG Management Working Group, Russian Union of Industrialists and Entrepreneurs (RSPP)
How can we implement carbon pricing and trigger significant shifts towards climate investment and innovation?
The use of carbon pricing and market mechanisms is advancing worldwide, with schemes already in operation or scheduled at national and regional level. This session presents the approaches of different countries and will discuss how the generated income can be used sustainably.
A carbon price encourages emissions reductions as it internalizes the negative impacts and therefore increases the costs of pollution. High-carbon energy becomes more expensive and disadvantageous, therefore levelling the playing field for clean energy technologies. A strong, predictable and equitable carbon price can be achieved through direct carbon taxes or emission limits with tradable permits (i.e. cap-and-trade). It can be supported by reducing fossil fuel subsidies. Carbon pricing creates additional income streams for the state budget that can be used to finance further climate mitigation activities, to reduce distortionary taxation, and to advance other societal goals. By itself a carbon price is insufficient to achieve emission reductions across all sectors. It should therefore be complemented by a wide range of policy tools promoting the decarbonisation of the economy.