Many countries have announced their pledge to cut greenhouse gas emissions. They are resorting to using carbon pricing as a tool to convert their promises into real action. According to the World Bank, 46 national and 32 sub-national carbon pricing schemes covering about 22% of global emissions are operating today or in the planning stage. The schemes could come as a tax or a carbon limit.
The European Union launched carbon emissions trading systems (ETS) 15 years ago, which is currently the world’s largest. It includes power plants, aviation, and other energy-intensive industries and is mandatory for all 27 member states plus Norway, Iceland, and Liechtenstein.
Kazakhstan started its ETS in 2013 before suspending it in 2016 for reforms. The program was relaunched in 2018 and covers the energy sector, mining, and chemical industries.
This year, Mexico initiated a pilot carbon pricing scheme covering the power, oil and gas, and industrial sectors.
New Zealand’s ETS came into force in 2008 covering utilities, and producers of liquid fossil fuels including gasoline and diesel.
In Canada, Quebec launched its scheme in 2012, which covers electricity and energy-intensive industries.
South Korea started its ETS in 2015, which covers around 600 of the largest emitters which are collectively responsible for nearly 70% of annual domestic emissions.
Some regions in the US such as California, New York, Maine, Maryland, Massachusetts, Connecticut, Delaware, New Hampshire, Vermont, and Rhode Island, use carbon pricing.
China has pilot schemes in some provinces and cities, including Beijing, Shanghai, Shenzhen, Chongqing, Guangdong, and Hubei. The country may launch national ETS next year covering energy production and various energy-intensive industries.
