{
  "title": "MD Remarks to EU Pavilion Discussion on Carbon Pricing and Carbon Markets",
  "publication": "IMF News, December 1, 2023",
  "sourceUrl": "https://www.imf.org/en/news/articles/2023/12/02/sp-md-remarks-to-eu-pavilion-on-carbon-pricing-cop28",
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  "summary": "Thank you for bringing us together. I cannot think of a more important topic than accelerating decarbonization by pricing carbon. IMF research shows that the path of borrowing to fund decarbonization is not one that countries can afford to follow.",
  "publishDate": "2023-12-01",
  "sections": [
    {
      "heading": "Main message",
      "content": "- Accelerating decarbonization requires pricing carbon; borrowing to fund decarbonization is unaffordable while pricing carbon is pragmatic, raises revenues, creates incentives for behavior change, and is equitable.\n- These remarks have been lightly edited for clarity. (December 1, 2023)"
    },
    {
      "heading": "Three core points from the Managing Director",
      "content": "- Point One: Necessity of carbon pricing\n  - It is not possible to decarbonize fast enough without pricing carbon; IMF research is conclusive that pricing carbon is necessary for the speed of transformation required.\n- Point Two: At what level should carbon be priced?\n  - Current coverage and prices:\n    - \"close to 25% of emissions covered.\"\n    - Carbon average price for these covered emissions is \"$20 per ton.\"\n    - Price needed \"somewhere around $85 per ton by 2030 to keep ‘1.5 degrees alive’?\"\n    - \"75 percent of emissions yet to be covered.\"\n    - Overall average price today: \"$5 a ton.\"\n  - Conclusion: \"We have a way to go, and we need to go faster.\"\n- Point Three: Role of the IMF in supporting members\n  - Advocate for a broad approach that allows pricing carbon in different ways and builds the \"biggest possible tent\" for all pricing approaches.\n  - Preferential order of approaches cited:\n    - Best/most efficient: taxing carbon — \"Taxes are easy to execute: countries that have chosen to tax have shown that they continue to enjoy growth while their emissions go down.\"\n    - Alternative: emissions trading (example: European Union) — \"We can see how impactful it is. It also raises revenues.\"\n    - Acceptable under time constraints: regulatory approaches — \"indirectly pricing carbon by gradually increasing standards. Industries (and ultimately consumers) can pay the price for carbon emissions in that way.\"\n  - Political viability constraint: \"But taxing carbon is not politically viable in some countries, and we have no time to build political viability.\""
    },
    {
      "heading": "IMF policy recommendations and equivalency framework",
      "content": "- Build equivalency across approaches to facilitate broad adoption:\n  - First: equivalence covering \"tax, trade and regulatory compliance.\"\n  - Second: equivalency \"of carbon price vis-à-vis level of economic development: rich countries pay more, middle-income countries pay less.\"\n  - Acknowledge differential readiness: \"Some low-income countries are ready to establish a price of carbon, but others that maybe are fragile states – we must accept they are not part of this equation yet.\"\n- Strategic approach:\n  - \"If we go the way of carbon price equivalency, and then work hard to build the different approaches in a compatible fashion – we would take away the argument of political difficulty.\"\n  - Collaborate with partners: \"work with our partners: the World Bank, or OECD, the World Trade Organization -- to create two types of equivalency.\"\n  - Praise for WTO action: \"The WTO deserves praise for putting pressure on institutions to work together on a task force to work on equivalency and make sure that carbon pricing is something that is not just talked about, but that exists everywhere.\""
    },
    {
      "heading": "Key statistics and figures (verbatim)",
      "content": "- \"close to 25% of emissions covered.\"\n- Carbon average price for covered emissions: \"$20 per ton.\"\n- Price needed by 2030 to keep ‘1.5 degrees alive’?: \"$85 per ton by 2030 to keep ‘1.5 degrees alive’?\"\n- Share of emissions not yet covered: \"75 percent of emissions yet to be covered.\"\n- Overall average price today: \"$5 a ton.\""
    },
    {
      "heading": "Closing",
      "content": "- Urgent call to action: broaden acceptance of multiple carbon-pricing mechanisms, build equivalency across mechanisms and countries, and move quickly to scale coverage and raise prices to meet climate goals.\n- \"Thank you.\"\n\nIMF Managing Director speech, December 1, 2023.\n\n---\n\n\n References\n\n- https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva\n- Speeches\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2023/12/02/sp-md-remarks-to-eu-pavilion-on-carbon-pricing-cop28"
    }
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    "Published: December 1, 2023",
    "Accelerating decarbonization requires pricing carbon; borrowing to fund decarbonization is unaffordable while pricing carbon is pragmatic, raises revenues, creates incentives for behavior change, and is equitable.",
    "These remarks have been lightly edited for clarity. (December 1, 2023)",
    "Point One: Necessity of carbon pricing",
    "Point Two: At what level should carbon be priced?",
    "Point Three: Role of the IMF in supporting members",
    "Build equivalency across approaches to facilitate broad adoption:",
    "Strategic approach:",
    "\"close to 25% of emissions covered.\"",
    "Carbon average price for covered emissions: \"$20 per ton.\"",
    "Price needed by 2030 to keep ‘1.5 degrees alive’?: \"$85 per ton by 2030 to keep ‘1.5 degrees alive’?\"",
    "Share of emissions not yet covered: \"75 percent of emissions yet to be covered.\"",
    "Overall average price today: \"$5 a ton.\"",
    "Urgent call to action: broaden acceptance of multiple carbon-pricing mechanisms, build equivalency across mechanisms and countries, and move quickly to scale coverage and raise prices to meet climate goals.",
    "\"Thank you.\"",
    "[https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva](https://www.imf.org/en/about/senior-officials/bios/kristalina-georgieva)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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