Carbon pricing revenue increased in 2021 by almost 60% compared to 2020, to around $84 billion, according to the World Bank’s annual report on global carbon market trends and released today.
These revenues are an important source of funds to help support a sustainable economic recovery, fund broader fiscal reforms, or invest in local communities to support the transition to a low-carbon future.
The report State and Trends of Carbon Pricing currently lists 68 instruments that put a direct price on CO emissions2 : 36 carbon taxes and 32 emissions trading systems. Four new devices have been implemented since the 2021 edition — one in Uruguay and three in North America (Ontario, Oregon, New Brunswick) — while Israel, Malaysia and Botswana have announced the upcoming introduction carbon pricing policies.
The price of carbon has reached record highs in many jurisdictions, including the European Union, California, New Zealand, the Republic of Korea, Switzerland and Canada. However, the report finds that global emissions currently subject to a direct carbon price represent less than 4% only of the level that should be reached by 2030 to meet the objective of limiting global warming set by the agreement of Paris.
“The past year has been marked by very positive signals. The significant increase in carbon price revenues, in particular, makes it possible to increase investments in local communities and in support of the low-carbon transition. There is also progress in resolving issues related to CO2 emissions trading2 between countries, the new rules for international carbon markets adopted at COP26 in Glasgow making it possible to set a clearer political linehighlighted Bernice Van Bronkhorst, Global Director for Climate Change at the World Bank. It is now essential to maintain this momentum and to significantly increase both the level of carbon prices and that of the emissions subject to this price to ensure that the latter is fully mobilized for the benefit of a process of inclusive decarbonization. »
The 2022 report looks specifically at the growing interest in cross-border cooperation on carbon pricing, the challenges and opportunities associated with rising energy prices, and new technologies and frameworks for governance shaping carbon markets.
The new publication was presented at the Innovate4Climate conference. This flagship annual event of the World Bank Group dedicated to the challenges of climate finance, investment and markets is taking place this year from May 24 to 26, in virtual mode. The conference, now in its sixth edition, brings together government leaders and leaders from business, regulation and finance to discuss innovative climate finance solutions.
To view the 2022 report, click here.
To access all editions, click ici (a).
With World Bank
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