Countries around the world have implemented or scheduled for implementation 57 carbon pricing initiatives, this represents an increase from 51 in April 2018, according to the annual State and Trends of Carbon Pricing report launched by the World Bank at the Innovate4Climate conference in Singapore.
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 subnational level and in the Americas. Governments were able to raise approximately US$44 billion in carbon pricing revenues in 2018, with more than half generated by carbon taxes. This is an increase of nearly US$11 billion compared to the previous year.
“Carbon pricing remains one of the most promising measures to decarbonize 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.”
Despite this progress, governments are still very far from to meet the Paris Agreement objectives. The report finds 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 percent of global greenhouse gas emissions are covered by regional, national and subnational carbon pricing initiatives and, of these, less than 5 percent are currently priced at a level consistent with achieving the temperature goals of the Paris Agreement. It is crucial that governments take action to increase the breadth and the depth of carbon pricing.
This analysis was developed by the World Bank, with support from Navigant, the Carbon Pricing Leadership Coalition, the International Climate Action Partnership and the Partnership for Market Readiness.
For the first time, the report also examined the critical role of implicit carbon pricing, to highlight opportunities to design effective fiscal policies, such as fossil fuel subsidies and fuel taxes, to drive climate action.