The cost of emitting carbon dioxide must rise to $50-100 per tonne by 2030 if the world is to avoid the worst effects of climate change, according to a group of 13 senior economists.

The High-Level Commission on Carbon Prices, led by Nobel Laureate Joseph Stiglitz and Lord Nicholas Stern, said an intermediate step of $40-80 by 2020 was also needed.

Chancellor Philip Hammond announced in last autumn’s Budget that the UK’s carbon floor price would be frozen at £18 ($23) per tonne of carbon dioxide equivalent until 2020.

Commission member Professor Harald Winkler, of the University of Cape Town, said: “Specific carbon price levels will need to be tailored to country conditions and policy choices.

“Carbon pricing makes sense in all countries but low-income countries, which may be more challenged to protect the people vulnerable to the initial economic impacts, may decide to start pricing carbon at a lower level and gradually increase over time.”

Praise for corporates

The commission found that explicit carbon-pricing instruments – such as a carbon tax or cap-and-trade scheme – can raise revenue for countries efficiently, while revenues can be used to foster green growth.

The commission’s report also highlights action on carbon pricing by the private sector, with hundreds of companies already setting internal carbon prices to help inform their decision-making.

The report was released just days ahead of President Donald Trump pulling the United States out of the Paris agreement to tackle climate change.

> Download the report