Methane Emissions, Cooling Emissions, and Speeding Up the Transition

During day 6 of COP28, the U.S. presented a plan to reduce methane pollution by 80% from the natural gas and oil industry. Dairy methane emissions were also discussed, as several major food companies intend to create more sustainable farming and facilitate the reduction of these emissions for dairy farmers.

Reducing cooling emissions was another topic of interest, with 63 countries committing to the Global Cooling Pledge. This pledge requires them to reduce their emissions by no less than 68% by 2050. G20 countries are believed to have the majority of potential to reduce cooling emissions.

Increasing revenues for climate action can be achieved by raising carbon prices, as stated by Von der Leyen. She brought attention to the 175 billion euros raised over 18 years through the EU ETS. Von der Leyen also called for expanding the range of covered emissions, consequently reducing emissions and further increasing revenues.

The Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, reiterated in agreement with Von der Leyen that carbon pricing will lead to a faster transformation in alignment with the temperature limit set in the Paris Agreement. Von der Leyen also urged countries to complete their carbon markets, as only 23% of global greenhouse emissions are covered by the 73 existing carbon pricing instruments. Additionally, she stated that nations that did not practice deforestation, such as Kenya and Zambia, should be rewarded for the choices they made.

Although carbon taxation is the most efficient form of carbon pricing, not all entities can implement this strategy due to political reasons. Alternatively, a trade-based method for carbon pricing could be used, such as the Carbon Border Adjustment Mechanism (CBAM), which aims to prevent carbon leakage by charging fees similar to those set by the EU ETS on a number of carbon-intensive imports.