NEWS ANALYSIS

By Mathew Carr

Sept. 14, 2021 — LONDON: The public debate about globalish carbon pricing is shifting in the right direction.

News that the OECD wants to elevate carbon pricing to at least the OECD level to avoid trade wars is exactly what the European Commission had in mind as it proposed its carbon border adjustment — wider deployment of prices to help protect EU factories.

That adjustment may become largely uneccessary should the G20 nations all embrace carbon pricing of their choosing — IDEALLY at similar levels, though that may not be possible initially.

High prices — $100 plus — at OECD nations would be a good start but all nations will want to see the added investment that flows from green policy and emerging countries surely don’t want to miss out.

Rich countries need to make it easier for them – by offering financial support and incentives. Emerging nations do not want to be seen to be taken advantage of any more than they already have been, as their climate crumbles.

According to Politico, even some EU policy makers are concerned Mathias Cormann, the OECD head, was a a “mouthpiece for the U.S. administration” as he apparently recommended OECD level carbon pricing — flexible for each country.

Countries seem to be suspicious that industrial rivals will seek to cheat any system. Transparency is key to ease these suspicions. And blockchain tech allows it.

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Politico link, Sept. 11:
https://www.politico.eu/article/oecd-boss-carbon-pricing-should-come-through-us/

FT Snip, Sept. 13: OECD seeks global plan for carbon prices to avoid trade wars

Paris-based group calls on EU to back proposals that recognise countries have different green policies Bundles of steel in Shanghai.

The OECD is seeking a new global plan for carbon prices that it hopes will prevent trade wars from erupting between countries with different green policies. The Paris-based club of nations aims to follow its success in forging an initial agreement between nations on corporate taxes with a similar approach to carbon prices. This would allow economies such as the EU to move fast on limiting emissions while imposing reasonable carbon border taxes on imports from heavier polluting countries. Mathias Cormann, the secretary-general of the OECD, called on the EU to back the plan at last weekend’s meeting of EU finance ministers, according to people present. Cormann proposed that the European Commission join the project. Setting a price for carbon is widely considered the best way to drive down fossil fuel emissions as polluters can then effectively be taxed for the carbon they emit. One of its main sticking points, however, is determining what that price should be. The OECD believes it has a global solution. A carbon price high enough to limit temperature increases to below 2C since pre-industrial times, as agreed by the Paris climate accord, is seen as a step too far by the US, China and India. They prefer to use domestic regulations to cut emissions, such as banning coal-fired power stations…

https://www.ft.com/content/334cf17a-e1f1-4837-807a-c4965fe497f3