20% of greenhouse gas emissions derive from carbon prices
In recent statistics, the World bank stated, that carbon prices now hold accountability for over 20% of all greenhouse gas emissions. This is caused by a total of 64 carbon pricing instruments that are now in opera\tion worldwide.
This new data suggests that that the cabon pricing instruments that are now in operation generate an approimate $53 billion in revenue. This is a 17% increase from last year but we are still fairly unsure of of the full potential of carbon pricing.
The growth that we have witnessed over the last year can be largely directed from the uprise in EU allowance prices. The programme currently regulates the caps for emissions and requires additional costs for any counntries that exceed the current limits.
The report also highlights the January 2021, operational launch of China’s national Emissions Trading System (ETS) as well as the forthcoming changes to the EU ETS in line with the European Green Deal recery package.
With initial idea of covering emisions in the power sector, the market will now regulate roughly 4,000MtCO2 or 30% of China’s national emissions.
Due to the programmes short and long term climate ambitions, the EU allowance prices have never been as high as it currently stands. These prices could even rise again following the announcement of the green deal.
national ETS’s and carbon taxes have also been brought into operation or the Netherlands and Luxembourg by the UK and Germany.
In spite of the large number of carbon pricing instruments in operation, the World Bank is still under the impression that they are still fairly behind in what needs to be acheived for the temperature goals of the Paris Agreement.
Statistics also show that the majority of all carbon prices still stand below the $40 – $80/tC02 reccomendation for 2020 with the aim to meet the Paris climate agreement goal. As it stands, carbon prices in this range cover less than 5% of worldwide emissions.
Bernice Van Bronkhorst, Global Director for Climate Change at the World Bank said: “It is encouraging to see how governments and companies are integrating carbon pricing into their climate strategies. But the potential of carbon pricing is still largely untapped, despite the fact that it can be effective in driving decarbonisation for countries in all stages of development.”
“If implemented carefully, these policies can also be redirected to support lower income communities, getting resources to those who need them the most.”
The increase in prices have also been set in Canada, Germany and Ireland to name a few. New Zealand’s CCA (Climate Change Act) also estalished a national mitigation framework to help maintain current climate policies which included its ETS, in line with the 2050 net zero target.