ISLAMABAD: The value of the carbon pricing mechanisms globally has been estimated to be just under $50 billion in 2015, according to a recent report by the World Bank Group and Ecofys.

Emissions trading systems have grown in value to $34bn from $32bn in 2014. That rise is due in part to the addition of the S. Korea emissions trading scheme and the expansion of the California and Quebec cap-and-trade programmes.

Existing carbon tax systems are valued at around $14bn, said ‘Carbon Pricing Watch 2015’ released on Tuesday.

In 2015, around 40 countries and over 20 cities, states and regions representing almost a quarter of global greenhouse gas emissions, are putting a price on carbon.

Together, the carbon pricing instruments in these jurisdictions cover about half of their emissions, which translate to about 12 per cent of annual global greenhouse gas emissions.

As new pricing instruments emerge, already existing national and regional tools have been further developed and refined.

While industry protection and the allocation of carbon pricing revenue spending have been important topics in the discourse, structural reform is the top priority of the European Union agenda, the debate on the market stability reserve (MSR) having reached consensus on a 2019 start date.

A number of policy-makers in both developed and developing countries continue to voice their support for the critical role of carbon pricing in achieving a global decarbonised economy.

The role of the private sector in carbon pricing is growing. In addition, the adoption of an internal carbon pricing in business strategies is spreading, even in regions where it has not been legislated.

Currently, at least 150 companies are using an internal carbon pricing. These firms represent diverse sectors, including consumer goods, energy, finance, industry, manufacturing, and utilities.

Published in Dawn, May 28th, 2015

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