Efforts to reduce greenhouse gas emissions could also add significant revenue to national economies and steer countries toward the development of cleaner renewable energy according to Lagarde.
In referece to carbon emissions trading schemes Lagarde said: “There are two things that they should focus on. One is get the (carbon) pricing right and we can help them with that. The second thing we can do is gradually phase out and remove the subsidies that apply to energies, and particularly fossil energies.”
The subsidisation of fossil fuels also formed a key part of the discussions and Ms Lagarde pointed out that this currently amounts to upwards of US$485 billion Her organisation published a report in March that highlighted how rather than helping consumers, subsidies detracted from increased investment in infrastructure, education and health care.
A 2014 report is also due to be released providing U.S. policymakers with guidance on how to design a carbon tax within the context of broader fiscal reform and fiscal consolidation objectives.
