KUALA LUMPUR Sept 6 — The economic cost of adopting carbon pricing systems will vary based on the policies agreed, with more carbon-intensive sovereigns and industries facing greater challenges, Moody’s Investors Service said in a report published today.
The rating agency said while carbon pricing is an effective tool to incentivise higher carbon efficiency and can boost government revenue, adoption so far has been low, primarily reflecting the difficulty in achieving political consensus, given the costs for economies and sectors with high carbon intensity.
Moody’s vice-president and senior analyst Anushka Shah said economies with carbon-intensive exports would bear a larger economic cost from carbon taxes implemented globally.
“The costs will also likely fall on hydrocarbon-consuming nations, depending on the elasticity of demand, and more carbon-intensive industries, including transportation, coal mining, and oil refineries,” she said in a statement today.
Conversely, economies or sectors that supply low-carbon technologies stand to gain competitiveness over time, added Anushka.
Moody’s said policymakers globally were increasingly advocating carbon-pricing systems, in an indication of the growing commitment to decarbonisation and mid-century net zero emissions targets. — Bernama
