The World Bank has published the ‘State and Trends of Carbon Pricing 2019’ report, which provides an overview of existing and emerging carbon pricing instruments, and examines trends regarding their development and implementation and the ways in which they could advance long-term mitigation goals. The report looks at 57 carbon pricing initiatives, and finds that while carbon pricing policies continue making advances, coverage and price levels remain insufficient to meet the goals of the Paris Agreement on climate change, with only around 20% of global emissions covered by regional, national and subnational carbon pricing initiatives and less than 5% priced at a level consistent with achieving global temperature goals.
The report highlights new carbon pricing initiatives in the past year, mostly at the subnational level and in the Americas, including in Canadian provinces and territories, driven by Canada’s federal carbon pricing approach, and in Argentina, South Africa and Singapore. It also notes that Colombia, Mexico, the Netherlands, Senegal, Ukraine and Viet Nam are exploring new or complementary policies. In addition, for the first time, the 2019 report looks at the role of implicit carbon pricing, such as fuel taxes, to drive climate action. The report was launched in Singapore on 7 June 2019 at the Innovate4Climate conference, a World Bank Group event on climate finance, investment and markets. [World Bank Press Release]
UNFCCC Executive Secretary Highlights Critical Role of Carbon Pricing in Climate Action
During an EU high-level conference on international carbon markets in Brussels, Belgium, on 3 June, UNFCCC Executive Secretary Patricia Espinosa said that the right market signals can result in an increase in, and more accessibility to, renewable energy, and urged completion of negotiations on Paris Agreement Article 6 (cooperative mechanisms) at the 25th session of the Conference of the Parties (COP 25) to the UNFCCC in Santiago, Chile, in December. She said that any further delay would, inter alia: fragment carbon market action; mean that no central mechanism would be in place under the Paris Agreement to provide market access to Parties that lack the economic or regulatory capacity to access them independently; and erode confidence in the UN cooperative process. [UNFCCC Press Release]
Carbon Pricing Approaches in Eastern and Southern Africa
An East African Alliance on Carbon Markets and Climate Finance was launched during the Bonn Climate Change Conference in June 2019. The Alliance aims to: promote a common regional vision on carbon markets and climate finance; foster active and better coordinated participation of delegates from the region in UNFCCC negotiations on market mechanisms; and support readiness to implement Article 6. Several East African countries are already using market mechanisms to facilitate implementation of their Nationally Determined Contributions (NDCs) and aim to build on this experience for “accessing Article 6,” including transitioning Clean Development Mechanism (CDM) projects.
The Alliance is supported by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Global Carbon Market Project in East Africa, with the UNFCCC Regional Collaboration Center Kampala. It was inspired by the West African Alliance on Carbon Markets and Climate Finance. [NDC Partnership News Story]
A related UN Environment Programme (UNEP) report titled, ‘Carbon Pricing Approaches in Eastern and Southern Africa,’ explores possibilities of and obstacles associated with implementing carbon pricing in Ethiopia, Kenya, Rwanda, Mauritius and Uganda, as well as at the regional level. Commissioned to determine the potential for implementing carbon pricing approaches by gathering information on the feasibility of, and readiness for, carbon pricing/carbon market mechanisms, with a focus on existing legal frameworks, the report emphasizes the need to:
The study will help interested donors make decisions to support implementation of carbon pricing instruments, in line with the countries’ needs and priorities towards achieving their NDCs and the SDGs. [Report Landing Page]