Carbon pricing initiatives
This increase primarily due to the expected coverage
of the China national ETS. While this trend brings
the global coverage of GHG emissions closer to
the Carbon Pricing Leadership Coalition’s (CPLC’s)
target of 25 percent by 2020, further progress will
be needed to reach this goal.9
Carbon prices vary substantially, from less than
US$1/tCO2
e to a maximum of US$139/tCO2
e, as
shown in Figure 6 and Figure 7. Most initiatives saw an
increase in their 2018 price levels compared to those
in 2017. One substantial change was the growth in the
European Union Allowance (EUA) price from €5/tCO2
e
to €13/tCO2
e (US$7/tCO2
e to US$16/tCO2
e) as more
certainty developed on the future of the European
Union (EU) ETS in the post-2020 period. In addition,
planned tax rate increases occurred, including
the escalation of the France carbon tax rate from
€30.5/tCO2e to €44.6/tCO2e (US$38/tCO2e to
US$55/tCO2e) and the Switzerland carbon tax rate
from CHF84/tCO2e to CHF96/tCO2e (US$88/tCO2e
to US$101/tCO2
e). Despite these developments over
the past year, most jurisdictions have carbon prices
that are substantially lower than those needed to be
consistent with the Paris Agreement, as displayed in
Figure 7.
Goverment policy on carbon pricing
Governments raised approximately US$33 billion
in carbon pricing revenues in 2017, the source of
which was allowance auctions, direct payments
to meet compliance obligations and carbon tax
receipts. This represents an increase of nearly
US$11 billion compared to the US$22 billion raised
in 2016. Reasons for this increase include auction
revenues from the newly launched Ontario ETS and
revenues from the new carbon taxes in Alberta, Chile
and Colombia. Existing initiatives also contributed to
this trend, including a larger number of allowances
bought at auctions in the California ETS combined
with higher auction sale prices,10 and an increase in
the EUA price and the carbon tax rate in France. The
EU ETS remains the largest source of carbon pricing
revenues due to its size, followed by the carbon
taxes in , Sweden and Japan, as illustrated in
Figure 8
.