## Joint Report Explores Scope for Coordinated Approaches on Climate Action, Carbon Pricing, and Policy Spillovers _IMF News, October 23, 2024_ ## Source details **Canonical URL:** [Joint Report Explores Scope for Coordinated Approaches on Climate Action, Carbon Pricing, and Policy Spillovers](https://www.imf.org/en/news/articles/2024/10/23/pr24393-joint-report-explores-scope-coord-appro-clim-action-carbon-pricing-policy-spillovers) ## Other formats - [Markdown version](/en/news/articles/2024/10/23/pr24393-joint-report-explores-scope-coord-appro-clim-action-carbon-pricing-policy-spillovers/index.md) - [Structured JSON version](/en/news/articles/2024/10/23/pr24393-joint-report-explores-scope-coord-appro-clim-action-carbon-pricing-policy-spillovers/index.json) - [Bundle manifest](/en/news/articles/2024/10/23/pr24393-joint-report-explores-scope-coord-appro-clim-action-carbon-pricing-policy-spillovers/bundle-manifest.json) ## Bibliographic details - Published: October 23, 2024 --- ### Overview and purpose - Five international organizations released a joint report titled "Working Together for Better Climate Action: Carbon Pricing, Policy Spillovers, and Global Climate Goals" on October 23, 2024. - Convening and contributors: - Convened by the World Trade Organization and joined by the International Monetary Fund, the Organization for Economic Co-operation and Development, United Nations Trade and Development (UNCTAD), and the World Bank. - Objective: outline pathways for coordinated approaches on climate action, carbon pricing, and cross-border effects of climate change mitigation policies to help achieve global climate goals. ### Key factual findings and metrics - Carbon pricing instruments in effect: - "75 carbon taxes and emission trading schemes currently in effect worldwide, covering approximately 24 per cent of global emissions." - Trade-related climate measures: - "Over 5,500 measures linked to climate objectives notified to the WTO from 2009-2022." - International collaboration examples: - "The OECD's Inclusive Forum on Carbon Mitigation Approaches, now with 59 members." ### Major contributions of the report (enumerated) - Provides a common understanding of carbon pricing metrics to improve transparency on how countries are shifting incentives for decarbonization. - Examines the composition of climate change mitigation policies, emphasizing the important role of carbon pricing as a cost-effective instrument that also raises revenues. - Outlines how international organizations can support the coordination of policies to foster positive and limit negative cross-border spillovers from climate change mitigation policies. - Analyses the advantages and disadvantages of carbon border adjustment policies, including their impact on developing countries. - Shows how coordination can help scale up climate action by closing the transparency, implementation, and ambition gaps. ### Identified knowledge gaps and research needs - Need for more granular and better data on embedded carbon prices and embedded emissions. - Need for further work on the design of border adjustment policies and their interoperability. - Need for research on other approaches to enhance cooperation to increase ambition and ensure a just transition for all. ### Policy analysis and recommended focus areas (from institutional statements) - IMF Managing Director Kristalina Georgieva: - Carbon pricing and equivalent policies are important to scale up climate action. - "Global emissions need to be cut urgently to put the world on track to achieve the Paris goals and global ambition needs to be doubled to quadrupled." - Carbon pricing should be part of a well-designed policy mix, complemented with public investment support and sectoral policies. - International coordination on mitigation action could unlock progress. - WTO Director-General Ngozi Okonjo-Iweala: - Trade-related climate policies generate cross-border spillovers that can increase trade tensions and retaliatory trade actions. - Future work should focus on concrete ways to coordinate more ambitious carbon pricing policies and may require a framework for interoperability between carbon pricing and other climate mitigation policies. - OECD Secretary-General Mathias Cormann: - Aligning differing national approaches is needed for a truly global impact. - More coherent and better-coordinated global mitigation policies can help prevent carbon leakage or trade distortions while maximizing opportunities for innovation, cost savings, and shared benefits. - UNCTAD Secretary-General Rebeca Grynspan: - Emphasizes evidence-based climate-related measures, including Border Carbon Adjustments mechanisms (BCAs), that minimize negative spillovers on developing countries and other sustainable development goals. - Highlights constraints for less advanced economies: limited productive capacity, infrastructure for monitoring, verification, reporting, and fiscal space. - Commits to support developing countries to decarbonize and diversify economies, seize environmental-related export opportunities, and reduce compliance and trade costs associated with transitions. - World Bank Senior Managing Director Axel van Trotsenburg: - Technical assistance and financing can tailor climate policies to country context, capacities, political constraints, and development priorities. - Carbon pricing provides incentives for the private sector and public revenues to support development and help vulnerable populations manage the green energy transition. - Emphasizes the growing need for cooperation and coordination as countries introduce their own climate policies. - The report offers concrete ideas to design climate policies that benefit lower-income economies and help them accelerate development, create jobs, and participate in global value chains. ### Implications for policy coordination and next steps - Coordination goals: - Foster positive cross-border spillovers and limit negative spillovers from mitigation policies. - Close transparency, implementation, and ambition gaps to scale up climate action. - Practical priorities identified: - Develop interoperable designs for border adjustment policies and other coordination mechanisms. - Improve data on embedded carbon prices and embedded emissions to inform policy design and transparency. - Support capacity building and technical assistance for developing countries to ensure a just transition and minimize adverse spillovers. - Emphasis on balancing climate ambition with development objectives, fiscal considerations, and equitable treatment of less advanced economies. *IMF Communications Department, October 23, 2024.* --- ## References - [Press Releases](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) _Source: https://www.imf.org/en/news/articles/2024/10/23/pr24393-joint-report-explores-scope-coord-appro-clim-action-carbon-pricing-policy-spillovers_