WTO Launching Global Carbon Price Task Force

The World Trade Organization (WTO) is initiating a task force to create a method for determining worldwide carbon pricing. This effort aims to ensure that plans for taxing imports based on their carbon emissions do not unfairly penalize developing nations, as stated by director-general Ngozi Okonjo-Iweala on Tuesday.

Okonjo-Iweala emphasized the significance of a global carbon price to enable developing countries to maintain their competitiveness, particularly as Europe introduces import levies tied to the CO2 emissions of specific goods as part of its climate change mitigation efforts.

She noted that some WTO members consider these taxes as protectionist measures, while others lack the means to establish the carbon price for their exports.

"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?" Okonjo-Iweala said at the FT Africa Summit in London.

During IMF-World Bank meetings in Marrakech last week, she proposed the establishment of a multilateral task force to formulate a global approach to carbon pricing. "It has been accepted by all the finance ministers to form this task force. And I'm going to initiate it so we'll pull it together because I want our countries to have an approach and the methodology which would enable them to talk to the developed countries," she added.

She pointed out that African countries historically contribute around 3% of global emissions, making it crucial to avoid penalizing countries on the continent during Europe's transition to a lower-carbon future.

Regarding the European Commission's assertion that the border levy aligns with WTO regulations, Okonjo-Iweala stated that there is "no WTO rule against pursuing net-zero goals" as long as it doesn't hinder fair competition.

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