Bank of Israel: Toward a Carbon Pricing Strategy for Israel
In view of the climate crisis: The Ministry of Environmental Protection and the Bank of Israel are holding a joint expert workshop to discuss global warming, its potential effect on the Israeli economy, and possible mechanisms for reducing greenhouse gas emissions in accordance with the international commitments Israel has taken upon itself, and if future acceleration of the process is decided upon.
Minister of Environmental Protection Gila Gamliel: “We are stepping up the struggle against the global climate crisis, and carbon pricing is the most efficient economic tool for reducing greenhouse gas emissions. In this process, we will join the vast majority of OECD countries that are pricing carbon while also setting out mechanisms that empower the environment and increased energy efficiency.”
Bank of Israel Governor Prof. Amir Yaron: “Discussing global warming and its implications for economic activity is becoming increasingly important in the economic discourse and decision-making processes around the world. Studying the issue and developing ways of assessing its impacts are part of the Bank of Israel’s research work, and raising awareness of this issue is important in my view. I welcome the fruitful collaboration between the Bank of Israel and the Ministry of Environmental Protection on this issue, and in hosting the joint workshop.”
Many countries, and the main international organizations, are paying increasing attention to climate change and its potential impact on the global economy. We are increasing our knowledge regarding the risks—to society, the economy, and the environment—that accompany climate change, and the activity aimed at preventing the realization of those risks is growing.
The Ministry of Environmental Protection and the Bank of Israel, together with other partners in the government, will study these and other issues in depth and consult with interested parties in environmental organizations and industry, and at the end of this process, we will be able to make recommendations to the government of Israel regarding the optimal carbon pricing policy.
In this context, one can learn from international experience regarding the implementation of carbon pricing mechanisms while directing some of the proceeds from the mechanism to reducing its economic impact through refund mechanisms to the lower income deciles and fiscal breaks to sectors that have suffered a negative impact. It is also customary to divert some of the proceeds to investments in projects for the transition to a low-carbon and low-emission economy, such as low-polluting public transportation and energy-calibrated buildings.
Various analyses and studies presented at the joint expert workshop will be published separately.
