Pricing carbon helps tackle the climate crisis, says IMF

Governments have been deterred from explicitly pricing carbon due to the potential unpopularity of new carbon taxes, which have become favorite targets of anti-climate politicians and parties around the world.

Kristalina Georgieva, director general of the IMF, said it was possible to achieve the same result – making high-carbon activities reflect their true costs to society – by resorting to regulation and cutting bad subsidies that encourage the use of fossil fuels.

“We have been slow on a very important policy thought, which is the incentive for investors to continue to tolerate high levels of fossil fuel subsidies,” said Georgieva. “And [the world has made matters worse] by still being quite slow in introducing a carbon price and providing an upward trajectory for that carbon price.”

Carbon pricing would raise trillions needed to tackle climate crisis, says IMF https://t.co/J2Qz1zgzti

- Guardian news (@guardiannews) December 7, 2023

The IMF calculated that direct and indirect subsidies for fossil fuels, even without taking into account proven impacts – such as health costs – reached over 7 billion dollars, driven to record levels by governments' reactions to the crisis.

Your free retirementaria resources that could be applied to renewable energy and other low-carbon technologies, stimulating the market for “clean” growth, Georgieva said. On the other hand, she added, implementing a carbon price penalizesaria investments with a high carbon content.

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