G-20 finance leaders meeting in Venice over the weekend raised the idea of carbon pricing as a potential tool for lowering greenhouse gas emissions.
The communique issued Saturday, after finance ministers and central bank governors in the Group of 20 met, mentions carbon pricing as part of "a wide set of tools" that countries can use to coordinate climate change tactics. Other tools mentioned include investments in sustainable infrastructure and clean energy technologies, curtailing "inefficient fossil-fuel subsidies that encourage wasteful consumption." Carbon pricing mechanisms and incentives were mentioned as an option "if appropriate," along with targeted support for poorer countries.
"Climate change poses increasing physical and transition risks to macroeconomic outcomes and to regulated financial institutions and financial stability," the communique said.
The G-20 meeting was followed by an international conference on climate, where eight of the world's largest insurance companies launched their own net-zero insurance alliance, with commitments to transition their underwriting portfolios to net-zero greenhouse gas emissions by 2050 and to decarbonize their investment portfolios by 2025.
Each insurer will set its own science-based, intermediate targets every five years and report annually on its progress in achieving them. They will also engage in governmental policies for a science-based and socially just transition of economic sectors to net zero, an alliance announcement said.
The insurance alliance members also belong to the Net-Zero Asset Owner Alliance convened by the United Nations. Through that, "insurers and reinsurers are already working towards decarbonizing their investment portfolios in line with climate science and the Paris Agreement," said NZIA Chairman and AXA Group CEO Thomas Buberl, in the announcement. "With this new Net-Zero Insurance Alliance, we are raising our climate ambition further by using our underwriting, claims, and risk management practices to help ensure and enable the transition to a resilient net-zero global economy."