EU finance ministers declare carbon pricing key to low carbon economy
19 October 2017 | Trading
The European Union Economic and Financial Affairs Council (ECOFIN) has declared that carbon pricing is one of the policies and incentives needed to drive investment in low carbon production.
In a statement outlining the Council’s conclusions on climate finance, ECOFIN confirmed that “carbon pricing is a key component of an enabling environment for shifting investments towards green and sustainable production technologies, and for promoting innovative solutions”. It also confirmed that it “supports carbon pricing initiatives as well as initiatives promoting the phasing out of environmentally and economically harmful subsidies and inter alia the continued phasing down of financing for emission intensive projects.”
President of the World Biogas Association (WBA) David Newman welcomed the declaration, which underlines the thinking behind the WBA conference on carbon pricing due to take place on 11 December in Brussels to mark the 20th anniversary of the Kyoto Protocol.
“Every waste practitioner knows that almost all materials currently cost less to buy new than recycled – the market is therefore sending out a highly misleading signal that it’s better to use virgin resources than recycled ones” said Mr Newman. “This is why we need to think about the consequences and effects of a carbon price that would price in positive externalities associated with recycling and negative externalities associated with natural resource exploitation and fossil fuel production/extraction. Carbon pricing could be a key measure to drive the circular economy and reduce greenhouse gas emissions in Europe, but we need to really understand the deeper economic and financial implications before diving in.”
The conference will include speakers from the United Nations Environment Programme, the World Bank, the Climate Action Network, C40 Cities, and others from industry and the third sector.
Mr Newman added that the Paris Agreement has given new impetus to the global commitment to tackle climate change, but there’s still an incredible amount to do before Europe gets on track to meet its emissions goals. The conference is the perfect opportunity to discuss and analyse the current status on carbon pricing and carbon markets, and how these could influence European policies on resource management and recovery.
The intervention comes as the European Commission is both discussing what a future Emissions Trading System (ETS) will look like post-Paris and finalising its Circular Economy package. The two policies are potentially synergic, as pricing in the value or the cost of avoided carbon emissions could have a significant impact upon markets for secondary raw materials from waste.
The call for a more effective carbon price has gathered strength in recent years with the Carbon Pricing Leadership Initiative (which includes major oil companies, government ministers, the International Monetary Fund, and the World Bank) and others arguing the case. Many believe that a system for pricing in the externalities of carbon emissions is imminent, and it was revealed this week that there has been a more than eight-fold increase in the number of global companies pricing carbon into their business plans over the past four years.
Source: Renewable Energy Magazine