Carbon pricing schemes are spreading around the world but will their architects learn from mistakes made in Europe’s flagship scheme?
Carbon pricing has been described as the “unfinished business” of the Paris climate accord, which world leaders signed last month at the UN’s headquarters in New York.
We Mean Business, a coalition of 400 companies that have pledged to take action on climate change, points out that carbon pricing was not part of the deal hammered out in Paris, but half of all countries’ commitments made in Paris depend on having some form of carbon pricing in place by 2020.
According to the World Bank, some 40 countries and 23 cities, states and regions around the world use carbon pollution pricing schemes, covering 7bn tonnes of CO2, and accounting for 12% of global emissions. This includes China, which is due to integrate several pilot schemes and launch its own emissions trading market next year, South Korea, and regional schemes in the US and Canada.
As well as cap and trade, jurisdictions are increasingly imposing taxes on fossil fuel emissions. The Canadian province of British Columbia has won praise for its revenue-neutral carbon tax, the first in North America, which covers three quarters of all greenhouse gas emissions and has cut emissions by 5%-15% in the past seven years.