WTO Launches Task Force to Determine Global Carbon Prices
WTO tackles fair carbon pricing
The World Trade Organization (WTO) is taking action to establish a task force that will develop a methodology to determine global carbon prices. This move aims to prevent developing countries from being unfairly penalized by import taxes based on carbon emissions. Ngozi Okonjo-Iweala, the director-general of the WTO, announced this initiative on Tuesday.
Supporting developing countries
Okonjo-Iweala emphasized the importance of a global carbon price in enabling developing countries to remain competitive as Europe implements import taxes based on the CO2 emissions of specific goods. The establishment of a methodology will ensure that developing nations can participate effectively, as some lack the necessary tools to determine the carbon price of their exports.
Creating a unified approach
Okonjo-Iweala expressed the need for a methodology that can be universally accepted, stating, “What we’re trying to do actually is to say, can we develop a methodology for global carbon price that everybody can sign on to?” She proposed the formation of a multilateral task force during recent IMF-World Bank meetings, and all finance ministers have agreed to support this initiative.
Protecting Africa’s interests
Okonjo-Iweala highlighted the significance of avoiding penalties for African countries, which historically contribute only 3% of global emissions. As Europe transitions to a low-carbon future, it is crucial to safeguard the interests of African nations.
Ensuring compliance with WTO rules
The European Commission maintains that the border levy aligns with WTO regulations. Okonjo-Iweala clarified that pursuing a net-zero goal is permissible under WTO rules, provided it does not hinder fair competition.
By establishing a task force and developing a global methodology for carbon pricing, the WTO aims to address the concerns of developing countries while promoting a fair and unified approach to combat climate change.
