Carbon markets around the world are continuing to expand and gather momentum, according to a series of case studies released by IETA, Environmental Defense Fund (EDF) and CDC Climate Research today, despite diverse challenges.
The case studies – released at Carbon Expo in Barcelona – find that while countries such asKazakhstan, Norway and New Zealand are opting for market-based carbon pricing systems, each system is tailored to suit the national circumstances.
Case studies on carbon markets and pricing in Australia, Brazil, the EU, Japan, India, Tokyo,South Africa, the UK and Switzerland have also all been updated, to reflect the latest in policy developments in these regions. Each case study identifies unique challenges and lessons learned for each market, such as how forestry could be handled in an ETS, addressing competition concerns and moving away from free allocations.
The World Bank estimates that the world’s emissions trading systems are now valued at $34 billion.1 A report by the International Carbon Action Partnership earlier this year found that jurisdictions with an ETS now represent 40% of global GDP.2
“This collection of work showcases how different governments have used market forces to curb emissions, tailored to their unique circumstances,” says IETA President and CEO Dirk Forrister. “As we increasingly move towards a bottom-up world of climate policy, these case studies offer an array of models that others can borrow from. They show that carbon markets can work for all regions, all circumstances and all economic structures.”
“It is highly encouraging to see the growth and development of carbon markets around the world,” said Gernot Wagner, Lead Senior Economist at EDF. “As more governments implement innovative and effective market systems, we are beginning to see the needle shift on global climate policy.”
“There is a growing consensus on the fact that carbon pricing is becoming a priority among economic decision makers around the world – the big question is how to put a price on carbon,” says Benoît Leguet, Director of CDC Climat Research. “These case studies provide a fantastic collection of experiences that can be extremely useful to share government experience and inform the implementation of these innovative climate policies.”
He adds: “Whatever their stage of maturation, each system has to overcome important challenges to ensure the credibility and the stability of the system and the emergence of a robust and predictable carbon price signal.”
1 The World Bank’s valuation is based on the price of allowances in all ETSs on 1 April 2015 multiplied by the allowance volume for 2015. See Carbon Pricing Watch 2015, released by the Bank on 26 May for more information.
2 See the ICAP Status Report 2015 for more information.
Source: Press Release