Carbon Pricing in Action

As of May 2021, 37 national and 27 subnational jurisdictions are putting a price on carbon.

Summary of regional, national and subnational carbon pricing initiatives implemented, scheduled for implementation and under consideration (ETS and carbon tax)

Carbon pricing covers 20% of global greenhouse gas emissions. But most initiatives are still below the $40-$80/tCO2e needed to stay consistent with achieving the temperature goal of the Paris Agreement, as identified by the High-Level Commission on Carbon Prices led by Joseph Stiglitz and Nicholas Stern.

The private sector is finding innovative ways to use carbon pricing to identify greater opportunities for GHG mitigation and reduce climate-related financial risks. Traditionally, companies use internal carbon pricing in their investment decisions to evaluate risks from mandatory carbon pricing initiatives. However, businesses are exploring new ways of using internal carbon pricing to manage long-term climate risks and align their investments with climate objectives. For instance, major banking institutions are using carbon pricing approaches to review credit applications and assess their own portfolio footprint, while major indices are accounting for climate risks and climate policy including carbon pricing. Financial institutions are also increasingly applying internal carbon pricing in their investment decisions to manage climate-related risks and opportunities.