OECD Carbon Pricing report

The OECD has published a new report; Carbon Pricing in Times of COVID-19: What has changed in G20 economies? The report finds that more needs to be done using the full range of policy tools if countries are to match their long-term climate ambitions with outcomes. The report also finds that almost half of all energy-related CO₂ emissions in G20 economies are now covered by a carbon price, as several countries introduced or extended carbon taxes or emissions trading systems in recent years.

The report outlines that G20 economies priced 49 percent of CO₂ emissions from energy use in 2021, up from 37 percent in 2018. The increase was driven by new emissions trading systems (ETS) in Canada, China and Germany, new carbon levies in Canada, and a new carbon tax in South Africa, as well as Mexico’s introduction of carbon taxes at the subnational level.

G20 economies account for around 80 percent of global greenhouse gas emissions with energy-related CO₂ emissions making up around 80 percent of total G20 GHG emissions. The report outlines that recent progress has been driven by “explicit” carbon pricing which uses carbon taxes and emissions trading systems to raise the cost of carbon-intensive fuels, thus encouraging firms and households to make more climate-friendly choices. This also generates revenue that can be used to provide targeted support to improve energy access and affordability, enhance social safety nets, or invest in low-carbon infrastructure. Explicit carbon prices also offer an incentive for investment in clean technologies.

For more information read the report here.