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State and Trends of Carbon Pricing 2016
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State and Trends of Carbon Pricing 2016 report
Objective
To support the growing momentum for
carbon pricing initiatives worldwide, the
report will target the public and private
stakeholders engaged in their design
and implementation. The report will
focus on latest developments at both
regional and international levels.
Key Components
1. Status of Carbon pricing. Updated
overview of existing and emerging
carbon pricing initiatives around the
world—including national, sub-national
and corporate activities.
2. Analytical issue focus: carbon pricing
alignment with other climate policies. A
focused analysis of policy alignment
and its relevance in the development of
national and sub-national initiatives.
3. A forward-looking assessment of the
advantages of international cooperation
in reaching global targets. Some
modeling work provides an assessment
of cost saving potentials with focus on
INDCs submitted before COP21.
Internationally a historic step forward
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Photo by Arnaud Bouissou, December 12, 2015 Source: www.cop21.gouv.fr
Article 2: Hold the global temperature increase well below 2°C and pursue efforts to limit it below 1.5°C
Article 6: Pursue voluntary cooperation in the implementation of the NDCs
Paragraph 136 of the COP21 Decision: important role for tools such as carbon pricing
PARIS AGREEMENT
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Carbon pricing in INDCs
58% of the global GHG emissions
covered by these INDCs
29%
5%
24%
6 8
87
Domestic
Domestic and international
International
101 INDCs plan or consider using
carbon pricing
This includes 3 of the 5 world’s largest emitters
New carbon pricing initiatives since early 2015 Share
of glo
bal G
HG
covere
d b
y
carb
on p
ricin
g initia
tives
Starting year
Korea ETS
2015 2016 2017
South Africa carbon tax Portugal
carbon tax Chile carbon tax
0%
2%
4%
6%
8%
10%
12%
14%
California and Québec coverage increase from 35% / 30% to 85%
Four new carbon pricing initiatives implemented since 2015
BC GGIRCA
Australia safeguard
mechanism
Newcomers
Existing initiatives
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Ontario CaT Alberta
carbon tax
Summary of Carbon Pricing Initiatives
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1 Denmark ETS + tax 1 Chile tax 1 California ETS 1 Ontario ETS
2 Estonia ETS + tax 2 South Africa tax 2 Québec WCI ETS 2 Alberta tax
3 Finland ETS + tax 3 British Columbia ETS + tax
4 France ETS + tax 4 Alberta ETS
5 Ireland ETS + tax 5 Connecticut ETS
6 Latvia ETS + tax 6 Delaware ETS
7 Poland ETS + tax 7 Maine ETS
8 Portugal ETS + tax 8 Maryland ETS
9 Slovenia ETS + tax 9 Massachusetts RGGI ETS
10 Sweden ETS + tax 10 New Hampshire ETS
11 United Kingdom ETS + tax 11 New York ETS
12 Austria ETS 12 Rhode Island ETS
13 Belgium ETS 13 Vermont ETS
14 Bulgaria ETS 14 Beijing ETS
15 Croatia ETS 15 Chongqing ETS
16 Cyprus EU-28 EU ETS ETS 16 Guangdong China ETS
17 Czech Republic ETS 17 Hubei ETS
18 Germany ETS 18 Shanghai ETS
19 Greece ETS 19 Shenzhen ETS
20 Hungary ETS 20 Tianjin ETS
21 Italy ETS 21 Kyoto ETS
22 Lithuania ETS 22 Saitama Japan ETS
23 Luxembourg ETS 23 Tokyo ETS
24 Malta ETS
25 Netherlands ETS
26 Romania ETS
27 Slovakia ETS
28 Spain ETS
29 Iceland ETS + tax
30 Norway ETS + tax
31 Liechtenstein ETS
32 Switzerland ETS + tax
33 Australia ETS
34 Kazakhstan ETS
35 New Zealand ETS
36 Republic of Korea ETS
37 Japan tax
38 Mexico tax
SUB-NATIONAL
Implemented Scheduled Implemented Scheduled
NATIONAL
Growing global GHG emissions being priced
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Threefold increase of carbon pricing initiatives
in the past decade
Expansion of national and subnational jurisdictions
putting a price on carbon
7 out of the largest 10 global economies put a price on carbon
Carbon pricing instruments
currently value US$50 billion
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A Chinese national ETS in the horizon
The Chinese ETS could cover 4-6
GtCO2e, overtaking the EU ETS as the largest carbon
pricing initiative
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Carbon price in the private sector
Businesses and Long-term investors:
Carbon price is an intrinsic park of risk management strategy
To evaluate impact of mandatory carbon price in their operations
To identify cost saving opportunities in low-carbon investments
2015: 437 companies in all sectors using internal carbon price, up
from 150 in 2014, and 100 in 2013
Prices range from $1 to $357 / tCO2e, much higher than market prices
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Climate Change will impact financial gains in portfolios: prudent investors
reallocate capital from carbon-intensive toward climate-smart technologies
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Aligning carbon pricing policies
Successful carbon pricing needs to be
aligned with the broader policy landscape
serving multiple public objectives, of which
climate mitigation is just one.
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An international carbon market can significantly
reduce mitigation costs
2030
Continuing the carbon pricing momentum
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Implementation of the Paris Agreement and NDCs will require
increased cooperation between countries
Cooperation and linking initiatives in regional discussions on
potential future carbon pricing pathways
The High Level Carbon Pricing Panel: double carbon pricing
coverage to 25% by 2020; double this again in the next decade
Carbon Pricing Leadership Coalition to support: expanding,
deepening, converging
CPLC High-Level Assembly, Washington D.C., April 15, 2016
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Thank you!
Alexandre Kossoy
http://documents.worldbank.org/curated/en/26379305
https://openknowledge.worldbank.org/handle/10986/24288
http://www.carbonpricingleadership.org/
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BACK UP SLIDES
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An international carbon market can significantly
reduce mitigation costs
2050
Costs savings from international cooperation
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2050 mitigation costs US$ billion % of global GDP 2050
Without international carbon market
7,243 3.1
With international carbon market
3,302 1.4
Cost savings from international cooperation
3,940 (54% reduction)
1.7
Cost of meeting 2030 INDCs US$ billion % of global GDP 2050
Without international carbon market
354 0.25
With international carbon market
239 0.17
Cost savings from international cooperation
115 (32% reduction)
0.08
An international carbon market plays a critical role in:
Achieving a below two degree target
Huge cost saving potential
However, it also faces barriers and uncertainties:
Can countries afford to sell mitigation outcomes if they also have
NDC targets to reach and if they have complex packages of domestic
mitigation policies in place?
Can others countries afford to buy such mitigation outcomes if
facing risks on environmental integrity, comparability off efforts, and
international recognition?
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Barriers to an international carbon market
New political, technical and financial solutions are
required to overcome these barriers
A IEC é o movimento brasileiro dedicado ao contexto global da mudança do clima.
Nossa missão é fortalecer a liderança do Brasil na reação à mudança do clima e na
transição para uma economia de baixo carbono por meio da participação
empresarial.
A IEC é formada pela coalizão de organizações empresariais com reconhecimento internacional:
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Engage Brazilian companies in the debate about a comprehensive and
robust market approach aiming to reduce corporate GHG emissions
Emission Trading System Simulation of Business for
Climate Platform | EPC ETS
Ob
jeti
ve
s
28 companies participating in 2016
Co-create with business sector and deliver to the Brazilian
Government propositions for the design of possible national or
subnational ETS in Brazil
Growing global GHG emissions being priced
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Threefold increase of carbon pricing initiatives
in the past decade
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Continuing the carbon pricing momentum
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Implementation of the Paris Agreement and
NDCs will require increased cooperation
between countries
Cooperation and linking initiatives are gaining
momentum with discussions on potential future
carbon pricing pathways
The High Level Carbon Pricing Panel set forward
a global target: double carbon pricing
coverage to 25% by 2020, and double this again
in the next decade
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