China, US, EU need common approach to carbon pricing: Webinar

More efforts are needed for China, the United States and the European Union to work out a common trilateral approach to carbon pricing, which will help fight against global warming and tackle carbon leakage, officials and experts said at a recent webinar.

The event came right after the meeting of ministers of foreign affairs and development of G20 countries in Italy last week. It marked a key signal of multilateral cooperation in facing the urgent challenge of climate change, at a time when many countries have already started drafting or implementing their stimulating plans for the post-pandemic era.

Co-organized by the International Finance Forum and the Task Force on Carbon Pricing in Europe and the Paulson Institute on Wednesday, the webinar intended to pave the way for a debate on creating a global carbon pricing mechanism during the 26th UN Climate Change Conference of the Parties in Glasgow this November.

It brought together high-ranking officials, policy makers and scholars from China, the EU and the US, as well as representatives of the International Monetary Fund and Organization of Economic and Development, who discussed the efficiency of carbon pricing and called for cooperation between the world's three major economic powers and carbon emitters, the US, the EU and China.

"The three main economic powers in the world, which are also the three main emitters of carbon as well, working together on carbon pricing would be a signal of a game changer for the success of energy transition," said Edmond Alphandery, chairman and founder of the Task Force on Carbon Pricing in Europe and former Finance Minister of France, at the IFF 2021 Spring Meetings in May when introducing the trilateral carbon pricing collaboration.

The most recent research from the United Nations indicates that the speed of global warming is accelerating. According to Laurent Fabius, chairman of the 2015 UN Climate Change Conference in Paris (COP21), a UN research shows that there are now 40 percent of risk that average worldwide temperature will overcome the 1.5 degree limit before 2026. The common objective and commitment set by the Paris Agreement is to keep it stay under this limit till the end of this century. "It means a genuine Red Alert," Fabius said at the IFF 2021 Spring Meetings. He warned that continuing on the current trajectory, the world may risk a warming of three or four degrees by the end of the century. "I personally believe that putting a price on carbon emissions is essential," Fabius said.

Among the three major economies, the EU leads the emission trade, with a well-developed carbon market launched as early as in 2005 and at a current price of about 50 euros per ton of carbon dioxide. China officially announced its emission goals in 2019 to peak carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060. And US President Biden signed the instrument to bring the United States back into the Paris Agreement on his first day in office in January.

The EU-China Carbon Pricing Initiative has been promoted by both the IFF and the Task Forces on Carbon Pricing in Europe since 2019. This is the first participation from the US and the trilateral co-organization, and there will be a second webinar in autumn before the Glasgow COP26 to discuss about carbon pricing and global governance.

According to the United Nations, about 126 governments have formally discussed implementing net zero emission targets in about 2050.

The International Finance Forum is a non-profit, non-governmental independent international organization based in China. Founded in October 2003 by leaders of more than 20 countries and regions, such as China, the US, the EU, the UN and related international organizations, it is an institution for high-level permanent dialogue, exchange and research in global finance.