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IMF Chief in favor of carbon tax and cap and trade systems

Date
13 June 2014
IMF Chief in favor of carbon tax and cap and trade systems

NEW YORK: Christine Lagarde, head of the International Monetary Fund (IMF), has expressed her support for a carbon tax as a mechanism to combat further global warming at a conference in Montreal.

The IMF Managing Director was in Canada to address the International Economic Forum of the Americas, where she used the opportunity to stress that governments must address the costs climate inaction will incur.

The economist noted that efforts must be made to tackle atmospheric pollution, be they in the form of a carbon tax or a cap and trade system.

Expanding on this point in a radio interview with Canadian program, The Current, she argued that externalities such as water wastage and road congestion must be taken into account, stating “it cannot be about setting prices without including those externalities — whether it takes the form of a good, solid intelligent carbon tax, whether it’s a good, solid intelligent cap and trade system, or whether it is any other device that can be put in place in order to resist those externalities by including them in the price-setting."

When challenged with the accusatation that she was something of a “lone voice” amongst institutions and governments, Lagarde pledged her commitment to raising awareness, saying:“It’s not going to stop me from raising my voice when I know that the facts are right and the analysis is correct.”

However, the Managing Director also noted that the atmosphere at the International Economic Forum of the Americas in Montreal was positive and that her calls to climate action didn’t fall on deaf ears.

“I think everybody has an open mind and people are prepared to listen to others and to make progress, so let's hope that continues to be the case", the IMF chief asserted.

Image credit: MEDEF

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By Alana Ryan

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