|World Bank Reports that Carbon Pricing Schemes Gain Momentum|
The World Bank reports that around the world carbon pricing schemes have nearly doubled (from 20 to 38) since 2012, and the Carbon Disclosure Project (CDP), a non-profit that gathers environmental data for investors, reports that the number of companies putting a price on their greenhouse gas (GHG) emissions for internal planning in 2015 almost tripled (from 150 to 437), with the biggest increase in Asia, where China is slated to launch a national carbon market and South Korea has just introduced one.
The World Bank study estimates that carbon pricing instruments cover about 12 percent of all GHG emissions and that the combined value of those instruments in some 40 nations and 23 cities, states, and regions is $50 billion a year, $34 billion from markets and $16 billion in taxes. It showed that carbon prices, ranging from less than a dollar a ton of carbon dioxide in Mexico to $130 a ton in Sweden, are for the most part “considerably lower” than needed to help limit temperature rises to a United Nations goal of 2 degrees Celsius above pre-industrial times to avoid the most devastating effects of climate change. The study notes that ex-post analysis of the European Union Emissions Trading System, presently the world’s largest cap-and-trade system by traded volume, has not led industries to move to jurisdictions with comparatively low emissions costs on any significant scale but that the risk of carbon leakage remains as long as carbon price signals are strong and differ significantly among jurisdictions. According to the study, this risk, affecting a limited number of exposed sectors, can be effectively mitigated through policy design.
Last week, the European Union urged U.N. envoys to adopt international carbon market rules and emissions accounting systems by 2017. Negotiations on such systems are not expected to progress far at this year’s climate summit in Paris. To see the World Bank report, go to https://openknowledge.worldbank.org/bitstream/handle/10986/22630/9781464807251.pdf?sequence=5.