OECD seeks global plan for carbon prices to avoid trade wars



Sam Fleming and Chris Giles | Financial Times

The OECD is seeking a new global plan for carbon prices that it hopes will prevent trade wars from erupting between countries with different green policies.

The Paris-based club of nations aims to follow its success in forging an initial agreement between nations on corporate taxes with a similar approach to carbon prices. This would allow economies such as the EU to move fast on limiting emissions while imposing reasonable carbon border taxes on imports from heavier polluting countries.

Mathias Cormann, the secretary-general of the OECD, called on the EU to back the plan at last weekend’s meeting of EU finance ministers, according to people present. Cormann proposed that the European Commission join the project.

Setting a price for carbon is widely considered the best way to drive down fossil fuel emissions as polluters can then effectively be taxed for the carbon they emit. One of its main sticking points, however, is determining what that price should be. The OECD believes it has a global solution.

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