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G20 endorses carbon pricing for the first time
Date posted:
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Post Author
Patrick LaveryCombustion Industry News Editor
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Finance ministers from the G20 group of nations have collectively endorsed carbon pricing as a means by which climate change can be mitigated, having previously been divided on the issue. While the G7 meeting in early June led to its own range of climate-related announcements, the weakness of those pledges were that they did not include major economies (and polluters) like China, Russia, Brazil and India, which are part of the G20, making the new carbon pricing agreement perhaps more important from a pragmatic point of view. According to the Financial Times report on the matter, American economist William Nordhaus gave a keynote lecture at the conference (held in Venice, Italy), saying that it “is a painful, painful realisation, but I think we need to face it: Our international climate policy, the approach we are taking, is at a dead end,” urging the G20 to adopt carbon pricing to reinvigorate international climate action. To his mind, carbon pricing, along with carbon border taxes, would help to solve the economic problem of ‘free riding’, in which some actors within a group have an incentive not to act for the public good because they can reap a similar benefit from the actions they are reasonably sure other actors in the group will take. The conference also featured calls for multilateral development banks to be overhauled to be better climate-aligned.