(Glasgow) Prime Minister Justin Trudeau urged heads of state and government to cover 60% of global greenhouse gas emissions with a price on pollution in 2030, during a speech on Tuesday as part of the climate discussions at COP26 in Glasgow.
“We recognize at present that only about 20% of global emissions are covered by a price on pollution,” he said during his speech.
“We should be ambitious and say today that we want to triple that so that 60% of global emissions are covered by a price on pollution by 2030.”
Mr. Trudeau began the second and final day of the annual climate negotiations by co-hosting a carbon pricing event, showcasing Canada’s carbon price as one of the most ambitious and, in his words, rigorous. in the world.
“What a strong carbon price does, when properly designed, is actually influence private sector prices, transform the economy and support citizens by encouraging them to make better choices,” he said. he declared.
Justin Trudeau’s proposal received the support of European Commission President Ursula von der Leyen, World Trade Organization Managing Director Ngozi Okonji-Iweala, International Monetary Fund (IMF) Managing Director Kristalina Georgieva and United Nations Climate Finance Envoy Mark Carney, whose influence in the investment world as the former Governor of the Bank of Canada and the Bank of England is significant.
The notion of a global carbon price is not new. The IMF proposed such a system last spring.
“The average global carbon price today is $ 3 (per tonne),” Kristalina Georgieva said on Tuesday. “If we want to reduce emissions significantly to maintain our hope of not exceeding the 1.5 degree rise or nearly 1.5 degree Celsius, by 2030 we have to be at $ 75 or more (per ton ). ”
She said a minimum global carbon price would first require large emitters to have “compatible carbon pricing” and that the price should be fair so that large emitters and richer countries pay more, and that less developed and poorer countries pay smaller amounts.
Ursula Von der Leyen, with whom Justin Trudeau spoke one-on-one at the G20 leaders’ summit in Rome just before COP26, said the European carbon trading market in place since 2005 has seen huge success in reducing emissions from industries and energy and has proven that the economy can grow without increasing emissions.
She said that in Europe in general since 1990 emissions have fallen by 30% and economic growth has increased by 60%.
Ursula Von der Leyen said that “in a perfect world, I would like to have a global carbon price for all emitters in everyone”. But for those who don’t, Europe is introducing a carbon border adjustment which will mean that “if you bring a polluting product into our market, you will have to pay a price as if you were in the emissions trading system. issue of the European Union. ”
“But we prefer that you keep the money in your economy by putting a price on carbon in your economy,” she said.
Carbon pricing is not part of US President Joe Biden’s plan to tackle climate change, but Justin Trudeau said he is hopeful that other countries will realize that other ways to cut emissions are more expensive and less effective.
“The different countries will make their own decision on how they will (act) and what tools they will use, but we are here to demonstrate that it is done. It is done in a direct way that helps people and that will work to limit emissions. And I know that there are many countries that will be very interested in the example, the leadership of Canada and other countries that have already gone ahead with carbon pricing, ”he said. said at a press conference after his speech.
“And pricing carbon is one of the most efficient and cheapest ways to do that… It’s an extremely powerful tool that inspires businesses and consumers to make smarter choices,” added the Prime Minister. Minister.
Justin Trudeau said he is of the opinion that countries that choose not to price carbon “will have to do more in other sectors of their economy” and that in the end they will pay the price. more money to fight pollution.
“And that’s what is so appealing about carbon pricing. ”
Justin Trudeau also said that there must be measures to ensure that countries that do what it takes to reduce greenhouse gas emissions do not lose out economically against countries that do not put a price on them. on carbon and are therefore able to produce cheaper goods.
His government has begun consultations to explore the idea of imposing “carbon border adjustments” to ensure a level playing field, so that imported products are subject to the same carbon tariffs as Canadian products.
Justin Trudeau cited aluminum as an example, saying Canada has invested heavily in producing “the world’s cleanest aluminum”, but competes with cheaper aluminum produced elsewhere “in such a way. more polluting with significantly lower labor standards ”.
“I don’t think this is the kind of world we want, where people who do the right things the right way are penalized and those who do the wrong things the wrong way get benefits,” he said. he declares.
Justin Trudeau began the first day of the summit with a speech calling on the rest of the world to follow Canada’s lead and negotiate a global minimum carbon price.
He compares the idea to the 15% corporate minimum tax that more than 130 countries have now signed on to in an effort to prevent large multinational corporations from avoiding taxes by funneling their profits to low-tax countries. ‘taxation.
“This ensures that those who are leaders in pricing pollution are not unfairly penalized,” he said.
Carbon pricing has been a political minefield in Canada; the Conservative provincial premiers who opposed it led the fight to the Supreme Court, which ruled in favor of the federal government.
The Conservative Party of Canada, long opposed to carbon pricing, is itself now engaged in an internal debate on the substance.
Chief Erin O’Toole has vowed to implement another version of a carbon price in the recent election with a system similar to a reward card.
Unprecedented interest
The new Minister of the Environment Steven Guilbeault said on Monday that he believes this edition of the COP could be the one that will trigger the start of a real negotiation towards a global carbon price.
He clarified that there was a level of interest in the idea that he had never seen before.
The Minister for the Environment indicated that “it was not a done deal” adding that the Glasgow conference has the potential to be the moment when we really start to work on the development of such an initiative.
Carbon pricing in Canada began in 2019 at $ 20 per tonne and is expected to reach $ 170 per tonne by 2030. The current price of $ 40 per tonne adds about 8.8 cents per liter of gasoline, or about 3 cents per liter of gasoline. , $ 50 more each time you fill your car with 40 liters of gasoline.
But the money is returned to citizens during tax returns to make the program income neutral. The idea is that a carbon price should not leave families less money, but encourage them to find ways to reduce the use of fossil fuels by increasing their cost.
It also applies to natural gas, propane, jet fuel and any other liquid fuel, depending on the weight of greenhouse gas emissions produced during the combustion of this fuel.
Canada’s national price only applies to provinces that do not have an equivalent provincial policy in place: Alberta, Saskatchewan, Ontario and New Brunswick.
A separate policy for large industrial emitters uses the same price, but is charged only on a portion of the total emissions produced, rather than on the fuels these emitters purchase to run their industrial machinery.
The international environmental group “Citizens Climate Lobby” says there are 64 carbon pricing policies around the world, including direct pricing on carbon emissions and cap-and-trade systems.
More than 20 of its systems are national policies, and the rest are subnational, including American states like California, Canadian provinces like Quebec, and cities like Tokyo.
The United States and Australia are the only two fully developed economies without some form of carbon pricing.