Emission trading and carbon taxes around the world (2021)
Carbon emission trading implemented or scheduled
Carbon tax implemented or scheduled
Carbon emission trading or carbon tax under consideration
Carbon pricing (or CO2 pricing) is a method for governments to address climate change, in which a monetary cost is applied to greenhouse gas emissions in order to encourage polluters to reduce the combustion of coal, oil and gas – the main driver of climate change. The method is widely agreed[1] to be an efficient policy for reducing greenhouse gas emissions. Carbon pricing seeks to address the economic problem that emissions of CO2 and other greenhouse gases (GHG) are a negative externality – a detrimental product that is not charged for by any market.
A carbon price usually takes the form of a carbon tax or a Cap and Trade system (generally via an emissions trading scheme (ETS)), a requirement to purchase allowances to emit.[2][3]
21.7% of global GHG emissions are covered by carbon pricing in 2021, a major increase due to the introduction of the Chinese national carbon trading scheme.[4][5] Regions with carbon pricing include most European countries and Canada. On the other hand, top emitters like India, Russia, the Gulf states and many US states have not introduced carbon pricing.[6] Australia had a carbon pricing scheme from 2012 to 2014. In 2020, carbon pricing generated $53B in revenue.[7]
According to the Intergovernmental Panel on Climate Change, a price level of $135–$5500 in 2030 and $245–$13,000 per metric ton CO2 in 2050 would be needed to drive carbon emissions to stay below the 1.5°C limit.[8]
Latest models of the social cost of carbon calculate a damage of more than $300/tCO2 as a result of economy feedbacks and falling global GDP growth rates, while policy recommendations range from about $50 to $200.[9][failed verification] Many carbon pricing schemes including the ETS in China remain below $10/tCO2.[5] One exception is the European Union Emissions Trading System (EU-ETS) which exceeded €100/tCO2 ($108) in February 2023.[10]
A carbon tax is generally favoured on economic grounds for its simplicity and stability, while cap-and-trade theoretically offers the possibility to limit allowances to the remaining carbon budget. Current implementations are only designed to meet certain reduction targets.
^Hagman, David; Ho, Emily; Loewenstein, George (June 2019). "Nudging out support for a carbon tax". Nature Climate Change. 9 (6): 484–489. Bibcode:2019NatCC...9..484H. doi:10.1038/s41558-019-0474-0. S2CID 182663891. Archived from the original on January 28, 2020. Retrieved September 3, 2019.
^"What is a carbon price and why do we need one?". London School of Economics. Archived from the original on May 15, 2019. Retrieved May 15, 2019.
^"What is Carbon Pricing? | Carbon Pricing Dashboard". carbonpricingdashboard.worldbank.org. Archived from the original on March 11, 2021. Retrieved March 14, 2021.
^World Bank 2021, p. 23
^ abDavies, Paul A.; Westgate, R. Andrew. "China's National ETS Launches Trading". Latham & Watkins. Retrieved September 7, 2021.
^"State and Trends of Carbon Pricing 2023" (PDF). World Bank Group. Retrieved June 2, 2023.
^World Bank 2021, p. 14
^IPCC SR15 Ch4 2018, p. 374
^Kikstra 2021, p. 22
^"Carbon Price Viewer". EMBER. Archived from the original on September 15, 2021. Retrieved September 7, 2021.
Carbonpricing (or CO2 pricing) is a method for governments to address climate change, in which a monetary cost is applied to greenhouse gas emissions...
Carbonpricing in Canada is implemented either as a regulatory fee or tax levied on the carbon content of fuels at the Canadian provincial, territorial...
hidden social costs of carbon emissions. They are designed to reduce greenhouse gas emissions by essentially increasing the price of fossil fuels. This...
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designed to stem carbon leakage to countries without a carbonprice, what will also permit stopping giving free allowances to some carbon intensive sectors...
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far still a relatively expensive process. Carbon capture becomes more economically viable when the carbonprice is high, which is the case in much of Europe...
even though the prices for carbon were set at low prices. A 2023 study on the effects of the EU ETS identified a reduction in carbon emissions in the...
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different from a carbonprice. According to economic theory, a carbonprice should be set equal to the SCC. In reality, carbon tax and carbon emission trading...
are subsidies for coal-fired power stations,: 18 and the lack of a price on carbon pollution.: 1 The 2022 National Energy Plan forecast that 1.7 GW more...
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without a carbonprice. Lignite power stations built or retrofitted before 1995 often also emit local air pollution. In early 2021 the EU carbonprice rose...
to encourage decarbonisation of electricity generation in the UK: A CarbonPrice Floor to complement the European Union Emissions Trading Scheme (EU ETS);...
introduction of carbonpricing, and voted, along with the rest of the Labor Party, to establish the Clean Energy Act 2011, which instituted a carbonpricing scheme...
be special attention to carbon leakage and on price volatility. Since the pilot cities began this project, the price of carbon and caps has fluctuated...
Carbon dioxide removal (CDR) is a process in which carbon dioxide (CO2) is removed from the atmosphere by deliberate human activities and durably stored...
profitability of CCU depends partly on the carbonprice of CO2 being released into the atmosphere. Carbon capture and utilization may offer a response...
referred to as low-carbon diet), and by improving farming processes. Various policies can encourage climate change mitigation. Carbonpricing systems have been...
trading because, at over US$1000, the cost per tonne of carbon dioxide is many times the carbonprice on those markets. DAC was suggested in 1999 and is still...
National Broadband Network (NBN), and controversially implemented a carbonpricing scheme, which was widely perceived as a breach of a pre-election commitment...
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