G20 ministers support carbon pricing to help combat climate change

The G20 finance ministers collectively supported carbon pricing for the first time, describing this once controversial idea as one of the “broad tools” for tackling climate change.

The issue of taxing carbon dioxide emissions has long been divided among G20 members, and the United States has historically opposed it in particular.

“Tackling climate change and biodiversity loss and promoting environmental protection are still top priorities,” the G20 finance ministers said on Saturday after a meeting on a climate change issue. Global tax treaties And other problems in Venice. The organization stated that the solution may include “using carbon pricing mechanisms and incentives under appropriate circumstances” and expressed support for carbon prices in the communiqué for the first time.

Christine Lagarde, President of the European Central Bank, also emphasized the need for clarity in carbon pricing at the Venice International Climate Conference after the G20 negotiations on Sunday, emphasizing the importance of “effective carbon prices that reflect the real situation” . Carbon cost. ”

Carbon price is a necessary prerequisite for the establishment of a carbon border tax, which will be used as a tariff on imported goods from countries that do not have carbon pricing.More and more people are asking for such a tax, because the EU is preparing to introduce a series of Climate policy recommendations Wednesday, including the carbon border tax adjustment mechanism.

American economist and Nobel Prize winner William Nordhaus delivered a keynote speech at the conference, calling for the establishment of a “climate club” composed of countries willing to commit to carbon prices.

“A key factor in reducing emissions is high carbon prices,” he said, adding that the “climate club” will have to impose punitive tariffs on countries that do not set carbon pricing.

Nordhaus said this approach will help solve the free-riding problem, which has been plagued by existing global climate agreements, all of which are voluntary.

“This is a painful and painful realization, but I think we need to face it: our international climate policy, the approach we are taking, has come to an end,” Nordhaus said when referring to the annual COP climate summit. Say.

U.S. Treasury Secretary Janet Yellen did not mention carbon pricing in the same event, but instead explicitly called on multilateral development banks to “go further” on climate change issues.

Yelon urged multilateral development banks to align their investment portfolios with net zero emissions targets as soon as possible, and to work more closely with the private sector in the climate field.

BlackRock CEO Larry Fink called for a comprehensive reform of financial institutions such as the World Bank and the International Monetary Fund.

“In unlocking trust assets, pension fund assets, and asset owner capital, we need to rethink the role of these institutions. We need to rethink their models,” Fink said, referring to the World Bank and the International Monetary Fund.

Fink added that the two institutions operate on outdated systems “created more than 80 years ago.” “We need a financing system not built around bank balance sheets, but a financing system designed to attract more capital into sustainable investment.”

Opponents of global carbon taxes, especially in the United States, question whether it is politically feasible and warn about the impact on low-income households. But IMF President Kristalina Georgieva and other policymakers echoed Lagarde’s views, saying that the cost “is insignificant compared to the long-term cost of delayed action.”

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