Published on 09 May 2018

CSR

Five figures that prove the global fight for carbon pricing is (slightly) progressing

Since the signing of the Paris Climate Agreement, more and more countries have introduced taxes or markets designed to price CO² to push companies into investing more in energy transition. However, these efforts must be continued, according to the think tank I4CE, which recently published a panorama of carbon prices. For indeed, pricing policies are far from in line with the 2°C trajectory established by the Paris Agreement.

Carbon illustration iStock
46 countries and 26 provinces or cities have implemented carbon pricing, either through taxes or an emissions trading scheme
@Vladwel

1. $32 billion: the income generated by carbon pricing in 2017

"Carbon revenues are an increasingly important source of financing for the environment and the economy," says I4CE, a think tank specialising in climate economics. In 2017, carbon pricing instruments generated $32 billion (€26 billion) in revenue, 65 percent of which came from carbon taxes. In 2016, these revenues only totalled $22 billion. More than two-thirds of these revenues come from European Union member countries.

Nearly half (46%) of these revenues are used for projects dedicated to low carbon transition, 44% are allocated to the public budget, 6% to finance tax exemptions and 4% are directly transferred to companies and individual homes.

2. 60% of global GDP is covered by carbon pricing

As of April 1, 2018, 46 countries and 26 provinces or cities have implemented carbon pricing, either through taxes or an emissions trading scheme. This covers 60% of global GDP. But, according to I4CE, it is still "too little" to attack this issue.

3. 25 carbon pricing instruments have been announced for the coming years

In 2017, three Emissions Trading Schemes (ETS) and three carbon taxes were put in place. Among the countries to have completed this exercise are heavyweights such as China and Canada, which are among the top producers of greenhouse gases emissions. Thus, between 2016 and 2018, the percentage of global emissions covered by carbon pricing almost doubled, from 13% to 20/25%, primarily due to the enactment of Chinese ETS in 2017. More than 25 pricing instruments have been announced for the years to come.

4. From $1 to $139: the carbon price delta

There is no global price for carbon. As a result, prices vary considerably from one country to another! Therefore, where a tonne costs less than €1 in Ukraine, it reaches €139 in Sweden. Overall, pricing policies do not make it possible to attain the climatic objectives fixed by the Paris Agreement, specifically, a limitation on the increase of the earth’s temperature to no more than 2°C by the end of the century. 

5. 75% of the world’s carbon prices are less than $10 per tonnes

75% of emissions cover prices not exceeding $10 per tonne of CO²; an amount deemed too low by economic actors. In 2017, the High-Level Economic Commission on Carbon Prices, which is chaired by economists Lord Nicholas Stern and Joseph Stiglitz, recommended that prices range from $40 to $80 per tonne by 2020 and $50 to $100 per tonne by 2050.

Béatrice Héraud @beatriceheraud


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