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illuminem summarizes for you the essential news of the day. Read the full piece on the Financial Times or enjoy below
🗞️ Driving the news: The push for carbon pricing to decarbonize economies remains strong and is, in fact, gaining momentum across the world
• The European Union's carbon border adjustment mechanism (CBAM) has recently started, and the IMF is promoting the necessity of carbon pricing
🔭 The context: A few years ago, the IMF's Kristalina Georgieva initiated the idea of setting a global base for carbon prices, which drew parallels with international corporate tax reforms
• The US even expressed interest in creating a "carbon club" in the steel industry to restrict high-emission Chinese steel imports
🌍 Why it matters for the planet: Carbon pricing is crucial today, more than ever, in a world where the economic incentives to invest in energy transformation have dwindled due to increasing costs and rising interest rates
• Major central banks' strict monetary policies have impacted renewable energy company prospects, making carbon pricing a must to push for a cleaner world
⏭️ What's next: The IMF's new Fiscal Monitor report indicates that fiscal sustainability is better with a carbon tax, suggesting that countries can either implement taxes, carbon pricing, or regulations
• Action is increasing, with last month’s Africa Climate Summit calling for a global carbon taxation system
💬 One quote: "If anything, we need carbon pricing a lot more today than just a few years ago. The economic incentives for investing in the energy transformation we need have worsened significantly." (Martin Sandbu, Financial Times's European economics commentator)
📈 One stat: Adopting carbon policies without a tax can raise debt-to-GDP ratios by approximately 50%, while implementing carbon taxes could limit this increase to 10-15%
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