Carbon pricing policies continue to make headway, but coverage and the price levels are still insufficient.
Singapore, June 7, 2019 – 57 carbon pricing initiatives are now implemented or scheduled for implementation globally, up from 51 in April 2018 according to the annual State and Trends of Carbon Pricing report launched today at the Innovate4Climate conference in Singapore.
The report, which presents the latest developments of carbon pricing around the world, finds that in the past year new carbon pricing initiatives continued to emerge, mostly at the subnational level and in the Americas. These include new carbon pricing initiatives in Canadian provinces and territories, driven by Canada’s federal carbon pricing approach. At the national level, initiatives were launched in Argentina, South Africa, and Singapore; and countries exploring new or complimentary policies include Colombia, Mexico, the Netherlands, Senegal, Ukraine, and Vietnam.
However, the report concludes that both the amount of emissions covered by carbon pricing and the prices levels are still too low to meet the objectives of the Paris Agreement. About 20 percent of global greenhouse gas emissions are covered by regional, national and subnational carbon pricing initiatives and, of these, less than 5 percent are currently priced at a level consistent with achieving the temperature goals of the Paris Agreement (estimated to be between US$40–80/tCO2 by 2020 and US$50–100/tCO2 by 2030).
“Carbon pricing remains one of the most promising measures to decarbonize our economies, by pricing harmful pollution and boosting opportunities for low-carbon growth,” said John Roome, Senior Director for Climate Change, World Bank. “But to really have transformation at scale, both coverage and price levels need to be significantly higher. There is now a wealth of experience on how to implement carbon pricing effectively that others can learn from.”
For the first time, the report also examines the critical role of implicit carbon pricing. This highlights the opportunities to design effective fiscal policies, such as fossil fuel subsidies and fuel taxes, to drive climate action.
The launch event took place at Innovate4Climate, the World Bank Group’s flagship annual event on climate finance, investment and markets which brings together global business, policy and finance leaders to discuss innovative climate finance solutions.
NOTE: This work is a product of the World Bank, with support from Navigant, as well as from the Carbon Pricing Leadership Coalition, the International Climate Action Partnership and the Partnership for Market Readiness.
To download the full report, click here.
To access the report series, click here.