## Remarks by the Managing Director at the Carbon Pricing Leadership Coalition Meeting at COP26

_IMF News, November 2, 2021_

## Source details

**Canonical URL:** [Remarks by the Managing Director at the Carbon Pricing Leadership Coalition Meeting at COP26](https://www.imf.org/en/news/articles/2021/11/03/sp110221-georgieva-cop26-carbon-pricing-leadership-coalition)

## Other formats

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## Bibliographic details
- Published: November 2, 2021

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### Context and opening
- Event: Carbon Pricing Leadership Coalition Meeting at COP26, Glasgow, Scotland
- Date: November 2, 2021
- Speaker: Kristalina Georgieva
- Media relations contact listed: Phone: +1 202 623-7100; Email: MEDIA@IMF.org

### Current state of carbon pricing (findings)
- Recent country example: Uruguay introduced a carbon price of $120 per ton.
- Global average carbon price today: around $3 per ton.
- Target for meaningful emissions reductions and to retain hope of keeping temperatures within 1.5 degree-or close to 1.5 degrees: reach $75 a ton or more.

### IMF proposal: international carbon price floor (policy recommendation)
- Core proposal: an international carbon price floor to ensure large emitters have compatible carbon pricing.
- Equity design principle: a differentiated price depending on the level of development:
  - Lower for low-income countries.
  - Higher for middle income countries.
  - Somewhat higher again for rich economies.
- Pragmatism in instrument choice:
  - Preference: carbon tax, described as the most efficient approach.
  - Recognition: carbon trading also delivers incentives for innovation and “it works,” per cited example from the President of the European Commission.
- Inclusivity of the framework:
  - Proposes building a larger “tent” that includes tax and trade and allows for regulatory equivalency of a carbon price where pricing is not yet politically possible.
  - Objective: create equivalency of development level and equivalency of instruments.

### Rationale and risks of inaction
- Incentives: putting a price on carbon generates self-interest that helps drive emissions reductions.
- Risk if no common approach: adoption of border adjustment mechanisms, described as a “huge headache” and much less efficient than coordinated adoption of carbon price regimes with equivalencies.

### Tone and outlook
- The speaker is optimistic about progress toward compatible international carbon pricing.
- Emphasis on pragmatic, equitable, and inclusive design to achieve widespread adoption and efficiency gains.

*Remarks by the Managing Director at the Carbon Pricing Leadership Coalition Meeting at COP26, November 2, 2021.*

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## References

- [https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)
- [Uruguay and the IMF](http://www.imf.org/external/country/URY/index.htm)
- [Speeches](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [international carbon price floor](https://blogs.imf.org/2021/06/18/a-proposal-to-scale-up-global-carbon-pricing/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2021/11/03/sp110221-georgieva-cop26-carbon-pricing-leadership-coalition_