In China, Chile, and more than a dozen other countries around the world, the carbon markets of the future are beginning to take root.
Five Chinese cities and two provinces are in the process of piloting emissions trading systems with the goal of a building a national carbon market. The government has integrated its climate change strategy into its economic development planning, and it has committed to reducing its carbon emissions per unit of GDP by at least 40 percent by 2020 compared with 2005.
Australia introduced a carbon price in July 2012 to support its transition a low-carbon economy. Its biggest polluters now have to report on their emissions and pay $23 per metric tonne for carbon pollution, creating an incentive to reduce their greenhouse gases.
In Tokyo (pdf), a cap-and-trade system has been operating since 2010. By its second year, it had cut greenhouse gas emissions by 23 percent.
Other countries are also laying the ground for future market instruments that could reduce their greenhouse gas emissions cost effectively. They’re meeting this week as members of the Partnership for Market Readiness (PMR), a coalition of more than 30 developed and developing countries that began working together in 2010.