Reports call for UK carbon price of £75 per tonne by 2030 and global cooperation to reach net zero

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THE INTERNATIONAL Emissions Trading Association (IETA) has published its latest carbon pricing forecast and vowed to lobby for the net-zero transition by 2050 at the latest, while the Zero Carbon Commission is calling for a UK carbon price of £75 per tonne by 2030.

In the IETA’s Council Guidance on Net Zero Climate Ambition, the outlined guidance includes:

  1. Supporting the use of the scientific findings of the Intergovernmental Panel on Climate Change (IPCC) for developing climate policy.
    All IPCC scenarios for holding the global temperature rise to 1.5°C are based on deep
    decarbonisation that achieves a global balance of emissions from carbon sources and removals by sinks in the future. The concept of net zero is grounded in sound science.
  2. Supporting the Paris Climate Agreement (Paris Agreement) and the United Nations Framework Convention on Climate Change (the Convention).
    The support for the Paris Agreement includes its goal of holding “temperature increases
    to well below 2°C above pre-industrial levels and pursuing efforts to hold temperatures to 1.5°C. To deliver this goal, IETA agrees on the need to “achieve a balance between anthropogenic emissions by carbon sources and removals by sinks of greenhouse gases in the second half of the century.”
  3. Mandatory caps for greenhouse gas emissions must decline ultimately to net zero to align with the Paris Agreement’s goals.
    IETA supports “cap and trade” and other market-based policies that create a strong price
    incentive to deliver deep decarbonisation for covered sectors. For sectors that are not
    covered by carbon pricing, they support voluntary commitments by companies that seek to make their own contribution to the global effort.
  4.  Supporting trading between sectors and countries that are subject to emissions limits or caps, to enable and galvanise global community action to get farther and faster towards “net zero” together, than if each of us acts alone.
    Time is of the essence. International cooperation through trading has the potential to
    accelerate the achievement of net zero emissions.
  5. International trading can help make net zero possible for all companies, sectors and jurisdictions.
    Effective net zero policies will need to include cooperative approaches that reach across
    companies, sectors, states and regions to recognise the unique economic, social and
    environmental contributions that each country makes toward our collective global welfare. Without such cooperation, some countries simply will find net zero to be impossible.
  6. IETA pledges support in the development of meaningful net zero policies and strategies
    The Association believes that global market mechanisms, national and regional trading
    systems and all technological and natural climate solutions will be needed to deliver the
    ambitious goals of the Paris Agreement.

In their Interim Report, the Zero Carbon Commission suggests a phased, sectoral approach to carbon charging to help fund ‘a fair, green transition towards net zero.’

By 2025, there would be a simple carbon charge of £55/tCO2e (carbon dioxide and equivalents) on greenhouse gas emissions across much of the economy, rising to £75/tCO2e by 2030.

It would repurpose or replace many of today’s existing prices as an explicit carbon charge.

The revenue would be used to support investment in green alternatives, provide funds to cushion households from cost increases, and contribute to core government spending ‘in a way that also incentivises consumer and business behaviour.’

The Zero Carbon Commission was formed in February 2020 to review the UK
emissions pricing landscape, and explore how it might be re-designed to be consistent
with the UK’s net zero target.

Zero Carbon Commission’s full report on UK Emissions Pricing will be released in late summer 2020.