- A total of 57 carbon pricing initiatives are now implemented or scheduled for implementation globally, up from 51 in April 2018 according to the World Bank’s annual State and Trends of Carbon Pricing report.
- 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 sub-national 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 a national level, initiatives were launched in Argentina, South Africa, and Singapore; and countries exploring new or complementary 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% of global greenhouse gas emissions are covered by regional, national and sub-national carbon pricing initiatives and, of these, less than 5% are currently priced at a level consistent with achieving the temperature goals of the Paris Agreement (estimated to be between $40–80/tCO2 by 2020 and $50–100/tCO2 by 2030).
“Carbon pricing remains one of the most promising measures to decarbonise 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.”
Impact of carbon pricing
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.
To download the full report, click here.
Author: Babalwa Bungane
This article was originally published on ESI Africa and is republished with permission with minor editorial changes.