Domestic carbon pricing initiatives have been strengthened as jurisdictions around the world adopt more ambitious mitigation targets and introduce associated policy tools. This is particularly crucial as 2020 and 2021 are critical years for countries to ramp up their emission reduction pledges under the Paris Agreement, with many countries, regions and cities in the past year declaring a “climate emergency”.
Restrictions due to the COVID-19 pandemic have led to a global economic downturn, with implications for climate action more broadly. The economic crisis triggered by COVID-19 has led to large shifts in energy consumption and consumer behavior, challenging the economic foundations of many countries. As communities start to bounce back and conversations turn to recovery and stimulus packages, countries should consider how measures can be designed to best support a transition to a low-carbon economy. Measures for kickstarting economies could be designed in such a way that they generate jobs and infrastructure that support the transition to net zero emissions by the mid-century.
This report provides an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national and subnational initiatives. It also investigates trends surrounding the development and implementation of carbon pricing instruments and how they could accelerate the delivery of long-term mitigation goals. Specifically, this includes the use of carbon taxes, emissions trading systems and crediting mechanisms. International cooperation on carbon pricing and the status of work surrounding Article 6 of the Paris Agreement is also canvassed.