European Commission President Ursula von der Leyen convened a significant event at COP28, focusing on advancing carbon pricing and carbon markets as powerful tools to achieve the goals of the Paris Agreement.
This initiative builds upon the Call to Action for Paris-aligned Carbon Markets, which the European Commission, Spain, and France jointly launched in June 2023.
President Ursula von der Leyen emphasized the central role of carbon pricing within the European Green Deal, highlighting that in the European Union, those responsible for pollution are required to pay a price for their emissions. This approach encourages innovation and investments in clean technologies.
Notably, since 2005, the EU Emissions Trading System (ETS) has successfully reduced emissions in covered sectors by over 37% and generated more than €175 billion in revenue.
Globally, 73 carbon pricing instruments are now in place, covering a quarter of total global emissions. However, President von der Leyen stressed the need for further and faster progress, with the EU ready to share its experience and assist others in adopting carbon pricing.
The event featured the participation of influential figures, including the President of the World Bank, Mr. Ajay Banga, the Director-General of the World Trade Organization, Dr. Ngozi Okonjo-Iweala, and the Managing Director of the International Monetary Fund, Ms. Kristalina Georgieva.
They all underscored the significance of carbon pricing for climate action and a just transition. Prime Minister of Spain, Pedro Sanchez, and President of Zambia, Hakainde Hichilema, also provided insights into their countries’ perspectives on the challenges and benefits associated with expanding carbon pricing and ensuring the integrity of international carbon markets.
The European Commission pledged to continue offering technical support to countries seeking to implement domestic carbon pricing systems and to assist them in developing robust approaches to international carbon markets that align with their long-term climate and development strategies.
Emphasis was placed on the importance of carbon credits being based on common and robust standards that ensure transparent and verified emission reductions through projects.
Following this event, COP28 is expected to play a crucial role in establishing benchmarks for international and voluntary carbon markets, ensuring their value and reliability, and promoting equitable sharing of benefits among participants.
The aim is to establish a credible standard that encourages transformative investments, respects environmental limits, and avoids unsustainable emission levels or undue reliance on vulnerable carbon removals.
