Top finance trade groups join calls for U.S. carbon pricing

FILE PHOTO: A car moves along an empty highway during the coronavirus disease (COVID-19) outbreak in Seattle, Washington, U.S. March 30, 2020. REUTERS/David Ryder/File Photo

(Reuters) - Major U.S. financial trade groups on Thursday joined calls for some type of carbon pricing in the United States, underscoring the growing corporate enthusiasm for steps to slow the pace of climate change.

“For markets to function you’ve got to have a price on carbon,” said Tim Adams, president of the Institute of International Finance, in an interview.

Its board includes leaders of banks, insurers and asset managers worldwide, including from JPMorgan Chase & Co, Citigroup Inc and State Street Corp.

A policy document the IIF is set to release with 10 other trade groups states that carbon pricing can “spur development of climate-related financial products, promote more transparent pricing of climate-related financial risks, and can inform and help scale key initiatives like voluntary carbon markets.”

Other backers include the American Bankers Association and the Investment Company Institute, representing top asset managers.

Adams said the group did not have a specific recommendation for what carbon pricing policies might eventually be adopted. Options for governments to impose prices include taxing emissions or creating emissions-trading systems like one operating in Europe and another planned in China.

The position is in line with recent comments from other U.S. business organizations such as the Business Roundtable CEO group, which said in September it supports carbon pricing.

U.S. President Joe Biden last month took steps to cut emissions including pausing new oil leases on public lands and cutting fossil fuel subsidies, but it is not clear if he would seek to persuade Congress to tax carbon or impose other wide greenhouse gas limits.

Before she was named Treasury Secretary by U.S. President Joe Biden, former Federal Reserve chair Janet Yellen backed a plan for the U.S. to tax carbon emissions and return the money as dividends to taxpayers.

Reporting by Ross Kerber; editing by Richard Pullin