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Report of the High-Level Commission on Carbon Prices

Meeting the world’s agreed climate goals in the most cost-effective way while fostering growth requires countries to set a strong carbon price, with the goal of reaching $40-$80 per tonne of CO2 by 2020 and $50-100 per tonne by 2030. That’s the key conclusion of the High-Level Commission on Carbon Prices, led by Nobel Laureate Joseph Stiglitz and Lord Nicholas Stern.

Report of the High-Level commission on Carbon Pricing

The report concludes that a well-designed carbon price is an indispensable part of a strategy for efficiently reducing greenhouse gas emissions while also fostering growth. It states that a strong and predictable carbon-price trajectory provides a powerful signal to individuals and firms that the future is low carbon, inducing the changes needed in global investment, production, and consumption patterns.

The Commission concluded that a $40-$80 range in 2020, rising to $50-$100 by 2030, is consistent with the core objective of the Paris Agreement of keeping temperature rise below 2 degrees. Carbon prices and instruments will differ across countries, and implementation and timetables will depend on the country context. The temperature target remains achievable with lower near-term carbon prices if complemented by other policies and instruments and followed by higher carbon prices later. However, this may increase the aggregate cost of the transition.

The Commission found that explicit carbon-pricing instruments, like a carbon tax or cap-and-trade scheme, can raise revenue for countries efficiently and these revenues can be used to foster green growth in an equitable way, depending on their circumstances.

Source: High-Level Commission (2017): Report of the High-Level Commission on Carbon Prices. Carbon Pricing Leadership Coalition https://www.carbonpricingleadership.org

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