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Gas emissions targets can strengthen economies

United Kingdom
Financial Times
02/08/2010
Angel Gurría

Sir, The call by ministers in France, Germany and the UK for Europe to target lower greenhouse gas emissions in 2020 (“Europe needs to reduce emissions by 30%”, July 15) spotlights the urgent need to steer private investment towards a low-carbon future at the least cost.

The recession has led to a decline in European Union and global emissions relative to the levels they would otherwise have reached. But absolute emissions are still rising globally and there will be short-term costs associated with additional greenhouse gas reduction.

Public finance can “prime the pump” for the investment in green technologies needed to make lower emissions targets feasible.

But the core effort will have to come from the innovative power and investment drive of the private sector.

The silver lining of such a scenario is that more ambitious GHG targets, combined with effective carbon pricing, will have the additional benefit of boosting public revenues.

Achieving a 30 per cent emissions reductions target through carbon taxes or permit auctions via the EU Emission Trading System could generate revenues of about €90bn, equivalent to about 1 per cent of EU countries’ combined gross domestic product in 2020. Germany is already using some proceeds from auctioned permits under the EU ETS to finance climate action in developing countries.

Such revenues can also be used to offset more distortive forms of taxation and contribute to fiscal consolidation. At a time when governments need to reduce their public budget deficits, this potential should not be dismissed lightly.

Forward thinking by governments to take on and carefully implement aggressive mitigation targets can bring the triple benefits of keeping cost of mitigation low, cutting fiscal deficits via additional public revenues, and cutting emissions.

Acting now and together is the best way to create new market opportunities and strengthen our economies while tackling climate change.

El contenido de las noticias que se presentan en esta sección es responsabilidad directa de las agencias emisoras de noticias y no necesariamente reflejan la posición del Gobierno de México en este u otros temas relacionados.

    

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