31 May 2017: The High-Level Commission on Carbon Prices issued a report concluding that, in order to keep the global temperature rise below 2°C above pre-industrial levels in a way that is cost-effective and fosters growth, countries need to set a carbon price of US$40-80 per ton of CO2 equivalent (CO2e) by 2020 and US$50-100 per ton by 2030.

The High-Level Commission consists of the world’s leading economists and is led by Joseph Stiglitz, Columbia University, US, and Nicholas Stern, London School of Economics and Political Science, UK.

Released at the Think 20 Summit in Berlin, Germany, on 29 May 2017, the report finds that a well-designed carbon price, which could be introduced through a carbon tax or a cap-and-trade system, is indispensable for reducing greenhouse gas (GHG) emissions in an efficient way. Carbon pricing could also be implemented by embedding notional prices in financial instruments and incentives that foster low-carbon programmes and projects, including specific project-based credits, drawing on the experience of the Clean Development Mechanism (CDM) under the Kyoto Protocol and the mechanism established under Article 6 of the Paris Agreement. The report highlights action on carbon pricing by the private sector, with numerous businesses already setting internal carbon prices to help inform their decision making.

The High-Level Commission on Carbon Prices brought together 13 leading economists from nine developing and developed countries to identify the range of carbon prices that, together with other supportive policies, would help implement the Paris Agreement.

According to the report, while achieving the Paris Agreement’s objectives will require all countries to implement climate policy packages, carbon prices and instruments may differ across countries, with implementation and timetables depending on the country context. The Commission also underscores the importance of complementing carbon pricing with policies to promote energy efficiency, renewable energy, innovation and technological development, and long-term investment in sustainable infrastructure.

“Our report builds on the growing understanding of the opportunities for carbon pricing, together with other policies, to drive the sustainable growth and poverty reduction which can deliver on the Paris Agreement and the Sustainable Development Goals (SDGs),” said Joseph Stiglitz and Nicholas Stern.

Convened by the Carbon Pricing Leadership Coalition (CPLC) in Marrakesh, Morocco, in 2016 and supported by the Government of France and the World Bank, the Commission brought together 13 leading economists from nine developing and developed countries to identify the range of carbon prices that, together with other supportive policies, would help implement the Paris Agreement. During five months of deliberations, the Commission explored multiple lines of evidence on the level of carbon pricing that would be consistent with achieving the temperature objective of the Paris Agreement. [Report of the High-Level Commission on Carbon Prices] [Publication Landing Page] [Think 20 Summit Website] [Carbon Pricing Leadership Coalition Press Release]