May 29 2018

Global Carbon Tax Take Up 50 Percent In 2017

Governments raised about USD33bn in carbon pricing revenue last year, a 50 percent increase from 2016, according to a new update by the World Bank.

Launched at the Innovate4Climate conference in Frankfurt on May 22, the World Bank's annual State and Trends of Carbon Pricing 2018 report shows that the implementation of carbon pricing initiatives has tripled over the last decade. Now, 70 jurisdictions have implemented, or are scheduled to implement, carbon pricing initiatives, including 45 at national level and 25 at sub-national level, the report said.

These mechanisms helped governments raise about USD33bn in 2017 in carbon pricing revenues from allowance auctions, direct payments to meet compliance obligations, and carbon tax receipts, up from USD22bn in 2016.

The recent expansion of carbon pricing schemes has been driven by new initiatives in the Americas, the report notes, including in Chile and Colombia, and in the Canadian provinces of Alberta and Ontario, and in the US states of California, Massachusetts, and Washington.

The December 2017 announcement by the Chinese Government that it plans to phase in an emissions trading scheme starting with the power sector was also significant, the World Bank said. With a fully operational Chinese ETS, carbon pricing mechanisms around the world are projected to cover 11 gigatons of carbon dioxide equivalent, or about 20 percent of global greenhouse gas emissions, up from 15 percent last year.

The report also finds that carbon prices are rising, with about half of emissions now covered by carbon pricing initiatives priced at over USD10 per tonne of CO2 equivalent, compared to one-quarter of emissions covered in the last report.

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