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IMF says uniform carbon-pricing should include emerging, developing economie 04.03.08, 12:41 PM ET WASHINGTON (Thomson Financial) - The International Monetary Fund (IMF) today said carbon-pricing aimed at cutting greenhouse gas emissions should be uniform across all economies because most emissions come from emerging and developing countries, where reduction is cheapest. 'Any policy framework that does not include large and fast-growing economies such as Brazil, China, India, and Russia in some way (with a lag or with initially weaker emissions targets) would be extremely costly and politically untenable,' the IMF said in an analytic chapter of its April 2008 World Economic Outlook. Over the next 50 years, 70 pct of emissions will come from emerging and developing countries, where carbon reduction is least costly. If carbon prices were uniform across all countries, costs could be 50 pct lower, the IMF said. 'Carbon-pricing policies should be sufficiently flexible to accommodate cyclical economic fluctuations' as periods of high demand would make emissions reductions costly for firms, and lower demand could be cheaper. The IMF also recommended that the costs of mitigation -- efforts to limit the damage caused by global warming -- be distributed equitably across all countries. Existing mitigation policies, such as a uniform tax or cap-and-trade system, or a hybrid of both, 'would impose high costs on some emerging and developing economies.' Cap-and-trade systems allocate permits based on a country's current share of emissions, which essentially depends on it's technological capability and access to foreign technology. 'If policies were designed so that transfers flow from advanced economies to emerging and developing economies, this would reduce the costs of carbon-pricing policies for the latter two groups, encouraging them to participate,' the IMF said. tfn.newsdesk@thomson.com+tessa.moran@thomson.com tlm/wash/wash/am COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News. Neither the Subscriber nor Thomson Financial News warrants the completeness or accuracy of the Service or the suitability of the Service as a trading aid and neither accepts any liability for losses howsoever incurred. The content on this site, including news, quotes, data and other information, is provided by Thomson Financial News and its third party content providers for your personal information only, and neither Thomson Financial News nor its third party content providers shall be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon.
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