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Oil at the second phase of separation from the sand at the Suncor
tar sands processing plant near at their mining operations near
Fort McMurray, Alberta, September 17, 2014.
REUTERS/Todd Korol |
The move marked a massive shift from the previous four years when former U.S. President Donald Trump's administration routinely opposed the mention of climate change as a global risk in such international statements.
The communique, issued on Saturday after a meeting of Group of 20 finance ministers and central bank governors in the Italian city of Venice, which is threatened by rising sea levels, inserted a mention of carbon pricing among a "wide set of tools" on which countries should coordinate to lower greenhouse gas emissions.
Such tools include investing in sustainable infrastructure and new technologies to promote decarbonization and clean energy, "including the rationalisation and phasing-out of inefficient fossil fuel subsidies that encourage wasteful consumption and, if appropriate, the use of carbon pricing mechanisms and incentives, while providing targeted support for the poorest and the most vulnerable," said the communique from the financial leaders of the world's 20 major economies.
The statement was issued just days before the European Union was scheduled to unveil a controversial carbon-adjustment border tax on goods from countries with high carbon emissions.
"It is the first time in a G20 communique you could have these two words 'carbon pricing' being introduced as a solution for the fight against climate change," French Finance Minister Bruno Le Maire told reporters. "We have been pushing very hard to have these two words ... introduced into a G20 communique."
Those efforts met strong U.S. resistance for most of Trump's presidency, during which the United States quickly withdrew from the Paris climate agreement.
At a summit in Saudi Arabia in 2020, then-U.S. Treasury Secretary Steven Mnuchin agreed to a G20 reference to climate change, but not as a downside risk to global growth. Instead, it was included in a reference to the Financial Stability Board’s work examining the implications of climate change for financial stability.
The carbon pricing mention on Saturday marks the influence of the Biden administration, which immediately rejoined the Paris agreement in January and has set out ambitious carbon reduction targets and clean energy and transportation investment plans.
But while supporting emissions reductions, U.S. Treasury Secretary Janet Yellen called on Friday for better international coordination on carbon-cutting policies to avoid trade frictions.
The EU's carbon border adjustment mechanism (CBAM) would impose levies on the carbon content of imported goods in an effort to discourage "carbon leakage," the transfer of production to countries with less onerous emission restrictions. Critics of the measure worry that it could become another trade barrier without reducing emissions.
Links
- G20 Ministerial Meeting on Environment, Climate and Energy
- G20 High Level Tax Symposium on Tax Policy and Climate Change
- G20 ministers must scale up climate finance in solidarity with vulnerable countries
- High greenhouse gas emitters should pay for carbon they produce, says IMF
- Carbon price policies and international competitiveness in G20 countries
- Carbon Pricing for Climate Change Mitigation
- IMF chief urges G20 to adopt carbon price floor to reach climate goals
- G20 Zero Carbon Policy Scoreboard (pdf)
- IMF's Georgieva calls for 'carbon price floor' to curb emissions
- US's Yellen urges better coordination on carbon policy
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