World Bank REMI Briefing: How to Make Carbon Pricing Simple
By Joe Robertson
Last week, at the World Bank headquarters, in Washington, DC, Scott Nystrom and Fred Treyz of REMI joined John Hansen and myself of Citizens’ Climate Lobby, to brief leading economists, policy experts and researchers. The centerpiece of the briefing was Scott’s detailed report of the findings of the study he published in June 2014, on the economic impact of a revenue-neutral Fee and Dividend (F&D) plan.
No constraints were put on Scott’s analysis or the reporting of findings, except that he model the impact of a revenue-neutral Fee and Dividend plan, with a carbon fee assessed at the source of the fuel, starting at $10/ton of CO2 emissions, and rising steadily at $10/ton/year. The room was filled with leading economists and technical advisors from across the World Bank Group and the International Monetary Fund. Interest was such that the World Bank Group insisted on being the hosts of the briefing.
The meeting was a breakthrough in several ways:
- experts with widely varying views were able to talk to each other openly about a policy few had previously studied (F&D);
- a new insight emerged: that aiming for a target price is one way to price carbon, but that a steadily strengthening price signal is a replacement for the pursuit of the target price;
- insights into the economic feasibility of carbon pricing for the United States were the core of the convsersation;
- it became apparent that many conservatives in the US are asking smart questions that might mark the step prior to implementation.
After Scott’s master class on Fee and Dividend, I was able to introduce some in the room to the Core Principles of the Pathway to Paris project: designed to allow the US Congress to lead by passing legislation, while coordinating world efforts to mirror the economic efficiency and market friendliness of the F&D plan. We are already working with some departments of the World Bank Group and the IMF to share content, connect stakeholders and policy makers, and build support for carbon pricing as the cost-effective, catalytic core of a viable Paris agreement.
The meeting was part of an effort to ensure that smart, market-friendly strategies to reduce carbon emissions and build future prosperity are not left out of consideration due to differences between leading economists and policy makers. Instead, the aim is to foster a more detailed understanding of the mechanisms of community-level economic efficiency, and to build policies that empower households and communities, while driving valuable energy and economic solutions.
Citizens’ Climate Lobby will be taking this message to Lima, with a series of online forum events and in-person briefings: http://pathwaytoparis.org/
We will continue to provide policy briefings and coalition-building workshop events for leading policy makers, stakeholders and global negotiators, as well as our Global Online Policy Forum series, live from the sidelines of major conferences and summits. And please, keep in mind that all of this is possible, because of the work all of you do, every day, to raise the level of debate, inform the legislative process and help our representatives be leaders on this vital global issue.
Joe Robertson is Global Strategy Director for Citizens’ Climate Lobby.
Originally posted Nov. 24, 2014