Daily Management Review

World Bank Reports Says $53 Bln Raised By Global Carbon Pricing Schemes In 2020


The money generated by countries all around the world from charging companies for emitting carbon dioxide (CO2) last year was almost 18 per cent year on year more – at about $53 billion, with some countries imposing new levies and prices on firms in some existing schemes rose, showed a report from the World Bank published on Monday.
A price on carbon emissions is also being put in place by many countries to help meet their climate goals in the form of a tax or under an emissions trading (ETS), or cap-and-trade, system.
The importance and role that carbon pricing can play in driving innovation and new technology for achieving net zero emissions was recognized by the seven largest advanced economies of the world last week.
"Despite the social and economic upheaval caused by COVID-19, jurisdictions and companies have not wavered in their commitment to fighting climate change," the report said.
The report noted that currently there were 64 global carbon pricing instruments in operation in 2021 while there were 58 of them operating in 2020. These managed to cover more than 21 per cent of the global green house gas emissions. That number was at 15.1 per cent in 2020.
The report also noted that China's national ETS - the world's largest carbon market was largely responsible for the global increase in emissions covered, which was launched by the country this year. That scheme covered almost 30 per cent of the emissions in the country which is equivalent to about 4 billion tonnes of CO2,
Higher prices in the European Union's ETS were primarily responsible for driving up the growth of revenues generated last year. There was a more than 30 per cent rise in the cost of carbon permits in Europe last year.
The price of carbon emissions in most parts of the world were still well below levels that have been identified would be required so as to be able to have enough resources to drive changes to meet the 2015 Paris climate agreement, the World Bank however also said.
"A majority of carbon prices still remain far below the $40–$80/tCO2e (tonnes carbon dioxide equivalent) range needed in 2020 to meet the 2 Celsius temperature goal," the report said. "Higher prices will be needed ... to reach the 1.5C target."
The Paris climate agreement has been signed by almost 200 countries around the world and the aim of the climate accord is to limit global warming to well below 2C (3.6 Fahrenheit) above pre-industrial levels, and preferably 1.5C.