G20 endorses carbon pricing as transition tool for sustainable economy

Posted on July 16, 2021 by Editor

The recent communiqué from the G20 Finance Ministers and Central Bank Governors includes the use of carbon pricing mechanisms and incentives among the set of tools available to facilitate the shift to a more sustainable economy, alongside its support for global reporting standards discussed here. This represents the first time the G20 has presented the use of carbon pricing as a weapon against climate change.

The communiqué recognises the need for closer international coordination on climate action, a mix which: “should include a wide set of tools, such as investing in sustainable infrastructure and innovative technologies that promote decarbonisation and circular economy, and designing mechanisms to support clean energy sources, including the rationalisation and phasing-out of inefficient fossil fuel subsidies that encourage wasteful consumption and, if appropriate, the use of carbon pricing mechanisms and incentives, while providing targeted support for the poorest and the most vulnerable.”

Read the G20 communiqué here, and coverage here and here.

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