The Strategist

IMF proposes minimum tariff on greenhouse gas emissions

04/23/2021 - 04:38

The IMF is proposing a minimum tariff on carbon dioxide emissions for large producers, the fund's managing director, Kristalina Georgieva, said.

Sishir Panthi
Sishir Panthi
"Our analysis...shows that a gradually rising price on carbon emissions, combined with investment in green infrastructure, could boost global GDP by more than 0.7% a year over the next 15 years and create millions of new jobs," Georgieva said, speaking at a climate summit hosted by the US.

Many companies already show the cost of emissions in their prices, she said, and more than 60 billing schemes have been developed.

"But now the global average price is $2 per tonne, it needs to rise to $75 per tonne by 2030 in order to reduce emissions in line with the goals of the Paris Agreement," Georgieva added.

"Due to the urgent need to act, we are proposing a minimum international carbon price for the countries with the highest emissions, such as the G20 countries," Georgieva clarified.

This is a pragmatic approach that can be implemented through taxation, emissions trading and other measures, she said.