Minister Dijksma: carbon pricing key to reducing CO2 emissions

Setting a global price on carbon dioxide emissions is essential in order to achieve the climate goals agreed upon in Paris. Carbon pricing ensures that the polluter pays, and makes investing in sustainable energy more attractive. A worldwide coalition, directed by the World Bank, can play an important role in this respect by interlinking various initiatives. This is what Environment Minister Dijksma will reiterate today during a meeting in Paris on climate change, which she will host together with her French counterpart Minister Royal.

At this meeting, in which the business community and civic society organisations are also involved, the participants will discuss concrete opportunities to make progress after the CoP21 in Paris.

Minister Dijksma: ‘Carbon pricing is the key to realising the climate agreements made in Paris. A price tag on fossil fuels makes it more attractive to invest in sustainable alternatives, such as windmill parks. This requires the polluter to pay, and enables the industry to compete on a globally level playing field. Thus we need to make sure that businesses do not even want to consider burning their fingers using coal. However, we can only achieve this if we collaborate across the world. This is what I am focusing on now, together with NGOs and companies.´

During the Informal Environment Council meeting on 14 and 15 April in Amsterdam, Ms Dijksma will continue the carbon pricing discussions with her European counterparts.

Worldwide coalition

Various countries and regions are currently working on their own systems for setting a price on CO2 emissions. In order to create a globally level playing field, these systems need to be able to work together. The World Bank is taking the initiative to this end with the Carbon Pricing Leadership Coalition that assists countries in developing an emissions pricing system if they do not yet have one. The Netherlands has pledged a contribution of 2 million euros for this purpose. 

Paying for CO2 emissions

Carbon pricing entails that businesses have to pay for the CO2 emitted by their production; for example, by paying a tax, or by being required to purchase and surrender emission rights. These expenses are reflected in product prices which encourages producers to develop production processes with lower carbon emissions. Worldwide transparency regarding the costs of CO2 emissions makes relocating production processes less attractive, and encourages businesses and investors to opt for alternatives that cause fewer emissions.