The Carbon Pricing Leadership Coalition aims to collect and facilitates access to up-to-date information that is tailored for policy makers and business leaders and practitioners on current and emerging practice in pricing carbon design and implementation, market trends, opportunities and trade-offs.
Meeting the world’s agreed climate goals in the most cost-effective way while fostering growth requires countries to set a strong carbon price, with the goal of reaching $40-$80 per tonne of CO2 by 2020 and $50-100 per tonne by 2030. That’s the key conclusion of the High-Level Commission on Carbon Prices, led by Nobel Laureate Joseph Stiglitz and Lord Nicholas Stern.
Convened by the Carbon Pricing Leadership Coalition (CPLC) at Marrakesh in 2016 and supported by the Government of France and the World Bank Group, the Commission brought together 13 leading economists from nine developing and developed countries to identify the range of carbon prices that, together with other supportive policies, would deliver on the Paris climate targets agreed by nearly 200 countries in December 2015.
Greater cooperation through carbon trading could reduce the cost of climate change mitigation by 32 percent by 2030. New modelling analysis undertaken for the State and Trends of Carbon Pricing 2016 report shows that increased international carbon trading could enable large-scale emissions reductions at much lower cost than at present, based on the carbon mitigation goals spelled out in countries’ national climate plans under the Paris Agreement - the Nationally Determined Contributions, or NDCs. By the middle of the century, an international market has the potential to reduce global mitigation costs by more than 50 percent.
The “FASTER” principles presented in this report lay out an approach that focuses on the emerging design features for successful and cost-effective carbon pricing policies drawn from initial and growing experience around the world. By maintaining a focus on fairness, alignment with existing policies, stability, transparency, efficiency, and reliability, the FASTER principles show that a well-designed carbon pricing instrument can provide the flexibility, and certainty for a thriving business, and investment climate, while effectively reducing emissions. Case studies provide concrete examples of how the principles are being implemented in practice.
Impacts Of A Global Carbon Price On Consumption And Value Creation
Implications For Carbon Pricing Design
For carbon pricing to cost-effectively support decarbonisation, it is essential to incentivise higher GHG productivity throughout global value chains. This is one of the findings presented by Ecofys and The Generation Foundation during the COP 22 in Marrakech. The study is the first released under the Carbon Pricing Unlocked partnership.
The TERI Council for Business Sustainability (a consortium of Indian industries) undertook a study on ‘Valuation of Energy Costs in the Indian Context’ along with CPLC and the World Bank Group, with the objective of gauging corporate sector’s preparedness in undertaking internal carbon pricing. The three phase project included extensive corporate consultations and deliberations, with 100+ business leaders on internal carbon pricing, its challenges, opportunities and possible methods of introducing carbon pricing among Indian businesses. These companies represented cement, oil and gas, chemical, automobile, textile, construction, IT, banking, power, manufacturing and mining sectors. A questionnaire was circulated among the industries and it was interesting to find that about 17% were already pricing carbon internally and another 40% were planning to do so in the next 1-2 years. A status report (outline paper) detailing about this enormous opportunity in India was tabled at the first edition of the World Sustainable Development Summit, in New Delhi, on Oct 5, 2016. The deliberations happened during a focused group meeting followed by plenary session on the business day of the summit, focusing on peer learning and experience sharing among the corporate sector on carbon pricing. The momentum on internal carbon pricing is rising among Indian Inc as they see it as a good tool to make their investments future proof; yet there is a need for hand-holding for improved technical understanding in arriving at the ‘right price’ of carbon emissions and adoption of the carbon pricing process.
Competitiveness and Carbon Leakage
What is the Impact of Carbon Pricing on Competitiveness?
Japanese version (Carbon Pricing Leadership Coalition, 2016)
Carbon Pricing & Addressing Competitiveness
Use of Revenues
What are the Options for Using Carbon-Pricing Revenues
Japanese version (Carbon Pricing Leadership Coalition, 2016)
The Investment of RGGI Proceeds through 2014 Regional Greenhouse Gas Initiative (RGGI, 2016)
Carbon pricing: how best to use the revenue?
(Grantham Institute, GGGI, 2015)
Two World Views on Carbon Revenues
(Resources for the Future, 2013)
Carbon Fee and Dividend Explained (Citizens Climate Lobby, 2016)
How to Use Carbon Tax Revenues
(Tax Policy Center, 2016)
Choose Wisely: Options and Trade-Offs in Recycling Carbon Pricing Revenue
(Canada Eco-Fiscal Commission)
British Columbia’s Revenue-Neutral Carbon Tax: A Review of the Latest “Grand Experiment"
(Nicholas Institute and University of Ottawa Institute of the Environment, 2015)
Carbon Pricing Revenues
How can Carbon Prices and Policies be effectively aligned? (Carbon Pricing Leadership Coalition, 2016)
Climate and Carbon: Aligning prices and Policies
Aligning Policies for a Low-carbon Economy
The FASTER Principles for Successful Carbon Pricing: An approach based on initial experience
(OECD/World Bank Group, 2015)
A Win-Win Solution to Abate Aviation CO2 Emissions (Joint Program on the Science and Policy of Global Change, MIT, 2017)
Carbon Market Readiness Training Guide (IETA, B-PMR, 2017)
Internal Carbon Pricing, A Growing Corporate Practice (English and French, EpE, I4CE, 2016)
Carbon Pricing: what the business sector needs to know to position itself (CEBDS and CDP, 2016)
Embedding a Carbon Price Into Business Strategy (CDP, 2016)
Executive Guide to Carbon Pricing Leadership
(UN Global Compact, WRI, 2015)
Emerging Practices in Internal Carbon Pricing
Investing in a Time of Climate Change
Preparing for Carbon Pricing: Case Studies from Company Experience - Royal Dutch Shell, Rio Tinto, and Pacific Gas and Electric Company
(Partnership for Market Readiness, 2015)
Markets Matter: Greenhouse Gas Markets 2014
Caring for Climate Business Leadership Criteria on Carbon Pricing
(UN Global Compact, 2014)
Carbon Market Clubs and the New Paris Regime
(Climate Strategies, 2016)
Networking Carbon Markets – Key Elements of the Process
(World Bank, 2016)
Toward a club of carbon markets
Creating a club of carbon markets: Implications of the trade system
(ICTSD, WEF, 2015)
Addressing Climate Change: A WTO Exception to Incorporate Climate Clubs
(ICTSD, WEF, 2015)
Towards A Global Carbon Market Prospects for Linking the EU ETS to Other Carbon Markets
(Carbon Market Watch, 2015)
The Sustainable Infrastructure Imperative: Financing for Better Growth and Development. (The New Climate Economy , 2016)
Galvanising low-carbon innovation (The New Climate Economy , 2016)
As countries construct their 2030, 2040, and 2050 greenhouse gas mitigation scenarios, they have increasingly identified cost-efficient policies, including carbon pricing instruments, as essential elements of proposed climate action. Countries’ activities in this regard differ based on their unique circumstances, and range from improving “carbon pricing readiness” to designing and piloting various carbon pricing instruments. This note provides updates on countries' activities.
Companies in a diverse range of sectors see carbon pricing as the most efficient and cost-effective means of tackling the climate challenge. Many companies are voicing support for government action to put a price on carbon. Many also assign a price on carbon internally.
An ETS is an explicit carbon pricing instrument that limits or caps the allowed amount of greenhouse gas emissions and lets market forces disclose the carbon price through emitters trading emissions allowances.
Emissions Trading 101 Library