High greenhouse gas emitters should pay for carbon they produce, says IMF

Companies with high greenhouse gas emissions should be subject to a carbon price of $75 a tonne of carbon dioxide, the International Monetary Fund has said, as a way of reaching the goals of the Paris climate agreement.

A carbon floor price would mean that companies, including energy generators and heavy industries, would have to pay for the carbon they produce. At present, many countries and regions have their own carbon pricing systems, but there is no globally agreed carbon price.

The IMF urged the G20 countries, made up of the world’s most developed and developing economies, to adopt a carbon floor price for their industries, as the quickest way of reaching net zero emissions.

A price of about $75 per tonne of carbon dioxide would be needed by 2030 to meet the goal of staying within 1.5C to 2C of global heating, set under the Paris agreement in 2015, the IMF said. Countries responsible for about three-quarters of global emissions have now set out targets to reach net zero emissions around mid-century, in line with the Paris goals.

Kristalina Georgieva, managing director of the IMF, said: “To help save the planet we must work together to prevent a climate crisis from turning into a catastrophe. A robust price on carbon can play a hugely important role – and even more so when it is a product of an international agreement. We see an international carbon floor price as a viable option to reach such an agreement and will continue our work on it.”

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