In a recent G20 meeting, for the first time, finance leaders recognized carbon pricing as a potential tool to address climate change.
Pricing carbon is considered by many economist as one of the best ways to tackle climate change. It would force polluters to pay for the damage their emissions are causing, creating a strong financial incentive for companies to reduce these emissions. This recognition marks a substantial shift since the Trump years, when multilateral action on climate change was considered impossible. What implications might G20 leaders recognizing carbon price as an important tool to address climate change have on climate action? Does this public recognition, coupled with China’s new emissions trading scheme and the European carbon price hitting unexpected highs signal a tipping point towards global commitment towards robust and comprehensive carbon pricing?