Global overview of carbon


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 .