By Andrea Shalal
WASHINGTON, June 18 (Reuters) – An agreement by some or all
of the Group of 20 countries on a flexible global carbon price
floor would help limit global warning to 1.5 to 2 degrees
Celsius, the International Monetary Fund said in a new staff
paper released Friday.
Such an agreement would cover a big percentage of global
carbon dioxide emissions, marking a major step toward needed
reductions in greenhouse gases, IMF Managing Director Kristalina
Georgieva told an event hosted by the Brookings Institution.
“To help save the planet we must work together to prevent a
climate crisis from turning into a catastrophe,” Georgieva said.
“We see an international carbon price floor as a viable option
to reach such an agreement and will continue our work on it.”
Experts say emissions must drop by one quarter to one half
to keep global warming to below 2 degrees Celsius. The IMF has
stepped up its efforts on climate change, citing what it sees as
“huge risks to the functioning of the world’s economies.”
Georgieva and other IMF officials argue that the right
climate policies can also provide tremendous opportunities for
investments, economic growth and green jobs.
The needed reductions in emissions were unlikely to happen
unless the global carbon price hit around $75 per ton by the end
of the decade, up from just $3 a ton now, Georgieva said.
Driving up the cost of polluting energy sources would
provide powerful incentives for increasing energy efficiencies,
said the paper, co-authored by Vitor Gaspar, head of the IMF’s
Fiscal Affairs Department, and Ian Parry, a top environmental
fiscal policy expert at the fund.
The paper, which is still being discussed with the IMF board
and the fund’s members, argues that adopting a flexible and
differentiated carbon tax floor with prices ranging from $25 to
$75 a ton could reduce emissions by 23% by 2030.
It said the scheme could start with the biggest emitters —
the United States, China, the European Union and India and other
G20 nations — and gradually expand to include other countries.
Georgieva said carbon taxes would be an efficient mechanism
to implement a carbon price floor, but regulation, emissions
trading and other measures could deliver equivalent outcomes.
A carbon price floor would also be “less divisive and far
more effective than unilaterally imposed border carbon
adjustments,” Georgieva said, according to a text of her
(Reporting by Andrea Shalal; Editing by Kim Coghill)