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An international carbon price floor (ICPF) could spur greater emissions reduction for carbon dioxide and other greenhouse gas (GHG) and to help address the global climate crisis, according to a new report by PwC and the World Economic Forum - “Climate Ambition: Analysis of an International Carbon Price Floor”.
”Adopting an international carbon price floor could be the most effective measure to encourage investment in renewable energy and significantly reduce global emissions by more than 12%. According to PwC calculations, the cost of implementation would be less than 1% of GDP, and that cost could be offset by avoiding economic losses associated with global warming”, said Dinu Bumbăcea, Country Managing Partner PwC Romania.
Current prices create an uneven playing field and limit the climate ambition of countries that fear loss of international competitiveness.
In June, the IMF put forward the framework for an ICPF that proposes different price points for emissions for economies at different stages of development. The IMF’s proposal calls for an ICPF that by 2030 would reach USD 75 per tonne for high-income countries, USD 50 per tonne for middle-income countries and USD25 per tonne for low-income countries. This structure is intended to mitigate the possibility that emissions will move to countries where the cost of emissions is low – carbon leakage – while encouraging low-income countries to participate.
Other findings from the report include:
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