The global value of carbon pricing instruments today is estimated at just under $50bn, according to a new report from the World Bank Group and Ecofys.
The study, called Carbon Pricing Watch 2015, calculates that emissions trading systems have grown in value from $32bn to $34bn in just one year.
It states that the rise is due in part to the addition of the South Korea emissions trading scheme and the expansion of the California and Quebec cap-and-trade programs. Existing carbon tax systems are valued today at around $14bn, according to the report.
Rachel Kyte, World Bank Group vice- president and its Special Envoy for Climate Change, said: “Carbon pricing is clearly gaining traction. In the last year, we’ve seen Chile and Mexico join the ranks of countries, cities and states putting a price on carbon. So it’s no longer a matter of if or when to price carbon.
“With the focus now on action in the run-up to the Paris climate summit in December, business and governments have walked across the battle lines and are now working together on how and how fast to get prices right. There is a growing sense of inevitability to put a price on carbon.”
The report describes the steady progress in carbon pricing that has been made over the decade and highlights positive developments since the beginning of 2014.
Carbon taxes were implemented in France, Portugal and Mexico, and tax legislation was passed in Chile. South Korea launched its emissions trading system while China put in place two new cap-and-trade pilots – in Hubei and Chongqing – and is gearing up for a national emissions trading system in 2016.
California and Quebec linked their cap-and-trade programmes and Ontario announced that it would implement carbon pricing and link to the California and Quebec systems.
The report states that this year, “about 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 translates to approximately 12 per cent of annual global greenhouse gas emissions.