Since launching two years ago, the Carbon Pricing Leadership Coalition has worked to make a strong business, economic, and environmental case for carbon pricing. Many more have joined since 2015 and today over 250 partners, drawn from government, business and civil society, are expanding the work of the Coalition to new lands and sectors.
In the last 12 months, we have seen debates translating into actions and carbon pricing gaining increased prominence in the political and business arenas. The High-Level Commission on Carbon Prices, co-chaired by Joseph Stiglitz and Lord Nicholas Stern, brought together a group of global thought leaders to examine the contribution pricing can make to achieving the Paris objectives. The conclusions underscored the need to raise ambition – prices in the range on $40-$80 range in 2020, rising to $50-$100 by 2030 may be needed to accelerate action.
On the implementation level, we saw eight new or enhanced pricing schemes around the world – leadership coming mainly from the Americas. The Pacific Alliance embarked on a working group to explore ways to advance green growth agenda by agreeing to a declaration in Cali that recognized the role of markets and expressing their intent to establish a voluntary market in the region. This contributed to the broader Carbon Pricing in the Americas declaration, made in Paris during the One Planet Summit, that further consolidates regional cooperation to advance climate action building on strong pricing signals.
This year, we also witnessed increased engagement from the business community, particularly from the financial sector. The Task Force on Climate Related Financial Disclosures (TCFD) launched four recommendations to help investors improve their ability to appropriately assess and price climate-related risk and opportunities. Such an understanding of the need for disclosing clear, comparable and consistent information about the risks and opportunities presented by climate change, triggered a new CPLC work stream that engages the banking and investor community to consider opportunities to use carbon pricing as a tool to stress-test their portfolios with a view to enhancing the understanding of climate risk to future investments.
As part of our work plan approved at our High-Level Assembly in April 2017, we developed focused work streams exploring the impacts of carbon prices on the construction value chain and maritime sector. This work will contribute to develop the understanding of the opportunities to price carbon at the sector level and building the case for approaches to doing so based on the experiences and lessons learned of key actors globally.
Broadening the application of carbon pricing also featured in the work of the Coalition this year. Africa came in greater focus throughout 2017, with plans to continue into 2018. Following on the leadership demonstrated by Cote d’Ivoire, the Coalition’s secretariat, in collaboration with some of the key partners and other strategic organizations, on the request of countries in the region, has initiated activities to build the business case for pricing from an African perspective. Initial conclusions form this work underscore the important role carbon pricing policies and measures can play in creating the enabling environment to advance the implementation of the national climate strategies as articulated in the Nationally Determined Contributions (NDCs) – stressing the need to frame carbon pricing in the context of sustainable development.
As we reflect on the work of 2017 and prepare for 2018, we thank the German government for their support for our upcoming work. With their funding, we will accelerate the implementation of the 2017-2018 work plan and scale up impact. In the upcoming months, we will continue our targeted work on carbon pricing in the maritime sector and the role of pricing carbon in climate risk assessment in the banking and investment sectors. Adding to that, we will focus on the role of carbon pricing in the energy sector; gaining a better understanding of best practices to communicating carbon pricing; and bridging the knowledge gap around the impact of carbon pricing on competitiveness.
Partners are the center of the Coalition’s work – their leadership and action drives momentum on carbon pricing forward and is inspiring others to join the conversation. Together, we remain committed to our strategy to broadening our engagement for a wider and more diverse coalition that will help us expand the implementation of carbon pricing schemes around the world; deepening our efforts toward meaningful price levels; and supporting the efforts to converge or link carbon pricing systems across jurisdictions.
The Carbon Pricing Leadership Coalition brings together leaders from government, private sector, academia, and civil society to expand the use of carbon pricing policies.
