The number of carbon pricing initiatives implemented or scheduled has almost doubled over the past five years, according to Carbon Pricing Watch 2017, a new publication released at the Innovate4Climate Summit on May 23, 2017.
Since 2016, eight new carbon pricing initiatives have been put in place – three at a national level and five at a subnational level.
“Carbon pricing initiatives are helping countries reach their climate change commitments at a lower cost,” said John Roome, Senior Director for Climate Change at the World Bank Group. “Well-designed carbon pricing instruments, implemented alongside other supporting policies and regulations, can help to incentivize large-scale climate action.”
On the international front, member states of the International Civil Aviation Organization (ICAO) have agreed on the first global sectoral carbon pricing initiative. ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation was adopted on October 7, 2016, capping greenhouse gas (GHG) emissions from international aviation at 2020 levels.
Canada, Mexico, Colombia and Chile have been at the forefront on carbon pricing developments in the Americas. In Canada, a national framework was put forward by the Government in 2016, requiring all jurisdictions to implement a carbon price by 2018. Canadian jurisdictions that do not already have carbon pricing initiatives have taken steps to implement this requirement. Mexico is also preparing for the launch of an emissions trading system (ETS) in 2018, while Colombia and Chile have introduced carbon taxes in 2017.
In Asia, Singapore has announced that it intends to implement a carbon pricing initiative in 2019. And China is preparing for the launch of its national ETS, planned for the later this year. The report says that China’s ETS, once launched, will be the largest carbon pricing initiative in the world.
To date, over 40 national and 25 subnational jurisdictions, responsible for about a quarter of global greenhouse gas emissions, are now putting a price on carbon. On average, carbon pricing initiatives implemented and scheduled for implementation cover about half of the total emissions from these jurisdictions. These numbers translate to a total coverage of about 8 gigatons of carbon dioxide equivalent (GtCO2e) or about 15 percent of global GHG emissions.
Globally, the total value of ETSs and carbon taxes in 2017 is US$52 billion, an increase of seven percent compared to 2016.
Looking ahead, next week at The Think20 (T20) Summit in Germany, the High-Level Commission on Carbon Prices, led by leading economists Joe Stiglitz and Nicholas Stern, will present its report setting out the recommended range of carbon pricing, together with types of policies needed to achieve the goals of the Paris Agreement.
To supplement the Carbon Pricing Watch 2017, the World Bank Group has launched the Carbon Pricing Dashboard, which provides an up-to-date overview of carbon pricing initiatives and allows users to navigate through carbon pricing initiatives with visuals and data.
Carbon Pricing Watch 2017 is a preview of a longer report called the State and Trends of Carbon Pricing 2017 which will be launched late 2017. These reports are prepared with the assistance of Ecofys, a Navigant company