IMF calls for differentiated carbon pricing floor to curb emissions

The International Monetary Fund has called for a “more equitable” carbon price floor to help contain carbon emissions based on the stage of an economy's development.

“We have proposed an international carbon price floor as a way to first ensure large emitters have compatible carbon pricing,” the fund's head Kristalina Georgieva said on Tuesday.

“What we suggest is that we make it equitable. In other words, it is a differentiated price – depending on the level of development. It is lower for low-income countries, higher for middle-income countries, and somewhat higher again for rich economies.”

The Washington-based multilateral lender has been vocal in calling for a higher price of carbon. The IMF has proposed a minimum price of $75 per tonne to help the world contain the warming of the planet to 1.5°C above pre-industrial levels

The proposal for more equitable pricing follows calls by India, the world's third-largest emitter, urging rich countries to pay more for carbon emissions.

India's Prime Minister Narendra Modi told heads of state gathered at Cop26 this week that rich nations needed to carry more of the burden when it comes to offsetting emissions.

“It is India’s expectation that the world’s developed nations make $1 trillion available as climate finance as soon as possible,” he said at the climate change summit in Glasgow.

“Justice would demand that those nations that have not kept their climate commitments should be pressured,” Mr Modi said.

An international carbon price floor – as proposed by the IMF – could help reduce global carbon emissions by 12.3 per cent by 2030, according to a report by the World Economic Forum and consultancy PwC.

The introduction of a carbon pricing mechanism is set to impact gross domestic product by less than 1 per cent. However, the cost is minimal when compared with the huge losses to be incurred by the global economy should global warming continue unabated.

If temperatures rise more than 3°C above pre-industrial levels, the global economy is expected to shrink by 18 per cent.

“The findings of our analysis are very encouraging,” said Bob Moritz, global chairman at PwC.

“The political and technical challenges remain very significant, but we hope the research will encourage countries to consider pricing carbon in such a way that it scales up the effort to reach net zero in time to limit the worst effects of climate change on people and our planet,” he added.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Islamophobia definition

A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.

Pupils in Abu Dhabi are learning the importance of being active, eating well and leading a healthy lifestyle now and throughout adulthood, thanks to a newly launched programme 'Healthy Lifestyle'.

As part of the Healthy Lifestyle programme, specially trained coaches from City Football Schools, along with Healthpoint physicians have visited schools throughout Abu Dhabi to give fun and interactive lessons on working out regularly, making the right food choices, getting enough sleep and staying hydrated, just like their favourite footballers.

Organised by Manchester City FC and Healthpoint, Manchester City FC’s regional healthcare partner and part of Mubadala’s healthcare network, the ‘Healthy Lifestyle’ programme will visit 15 schools, meeting around 1,000 youngsters over the next five months.

Designed to give pupils all the information they need to improve their diet and fitness habits at home, at school and as they grow up, coaches from City Football Schools will work alongside teachers to lead the youngsters through a series of fun, creative and educational classes as well as activities, including playing football and other games.

Dr Mai Ahmed Al Jaber, head of public health at Healthpoint, said: “The programme has different aspects - diet, exercise, sleep and mental well-being. By having a focus on each of those and delivering information in a way that children can absorb easily it can help to address childhood obesity."