State and Trends of Carbon Pricing 2014

The report focuses exclusively on data and information on the evolving initiatives that put a price on carbon, in terms of their most current status and emerging trends. It includes an expanded discussion on what the trends are telling us about the underlying motivations of and the direction the world is moving in when it comes to carbon pricing.The growing momentum for carbon pricing and the increasing prevalence of the topic in climate change discussions in recent years take us in a new direction for the report. More national and subnational jurisdictions and private sector entities are adopting carbon pricing. These encouraging developments warrant due attention and require tracking each scheme with enhanced detail.This report also includes a reflection on the engagement of non-state actors on climate action and carbon pricing—a development that characterizes the implementation phase the world has embarked on since the adoption of the Paris Agreement. This report takes stock of the latest developments in carbon pricing initiatives across the globe. It also investigates trends surrounding the development of carbon pricing instruments and how they could accelerate to deliver long-term mitigation goals. For the purpose of this report, carbon pricing refers to initiatives that put an explicit price on greenhouse gas (GHG) emissions. This includes emissions trading systems (ETSs), offset mechanisms, carbon taxes, and results-based climate finance (RBCF). Such initiatives, which will be discussed at length in this report, are being planned and implemented at international, regional, national, and subnational levels. Other policies that implicitly price GHG emissions, such as the removal of fossil fuel subsidies (which are also sometimes referred to as “negative carbon pricing”), fuel taxation, support for renewable energy, and energy efficiency certificate trading, are also necessary, but this report focuses on initiatives that put an explicit price on emissions.implicitly price GHG emissions, such as the removal of fossil fuel subsidies (which are also sometimes referred to as “negative carbon pricing”), fuel taxation, support for renewable energy, and energy efficiency certificate trading, are also necessary, but this report focuses on initiatives that put an explicit price on emissions.Section second of this report provides an overview of carbon pricing initiatives and recent developments. For the first time in this report series, this section also explores how emerging political and technological developments could help shape new trends in carbon pricing. Section third summarizes the latest developments of international cooperation, including the status of the implementation of the Paris Agreement and nationally determined contributions (NDCs). Section fourth reports on carbon pricing initiatives at regional, national and subnational levels, while Section fifth reviews internal carbon pricing approaches and prices used by private organizations and Multilateral Development Banks (MDBs) for decision making purposes.