Congress hates carbon pricing. The rest of the world doesn’t.

June 4, 2013

The idea of slapping a price on carbon to reduce emissions and tackle global warming is moribund in Congress for now. But that's not the case elsewhere in the world.

A big new World Bank report (pdf) finds that more than 40 national governments and 20 sub-national governments have either put in place carbon-pricing schemes or are planning one for the years ahead. That includes either carbon taxes or some form of cap-and-trade. Here's a map of the countries that are planning the latter:

So how pervasive is this? The report notes that the countries and regions with carbon pricing either in place or firmly scheduled are responsible for one-fifth of the world's carbon emissions. Now, there's a key caveat: The programs in place don't yet cover all sources of pollution — so, in practice, only 7.7 percent of the world's emissions have actually been priced. But that should give some sense of the scale.

The list includes emissions-trading in the European Union, South Korea, Australia and New Zealand. It also includes cap-and-trade programs at the state or provincial level, such as in California, New England, and Quebec. On top of that, there are carbon taxes in place in Denmark, Finland, Norway, British Columbia, and soon South Africa.

And that's just what exists now. The World Bank notes that developing countries like China and Brazil are also mulling over various carbon-pricing schemes. China, for instance, has set up pilot programs in seven different cities — including Beijing and Shanghai.

Getting those countries on board could be a big deal. “If China, Brazil, Chile, and the other emerging economies eyeing these mechanisms are included, carbon pricing initiatives could reach countries emitting 24 [gigatons of carbon-dioxide-equivalent] per year, or cover almost half of total greenhouse gas emissions," said Ecofys' Niklas Höhne, a lead author of the report.


Our favorite dramatic Europe-related image. (Michael Probst/AP)

Over at Clean Technica, Silvio Marcacci points out one other notable aspect of the World Bank report — the designers of many of the newer cap-and-trade programs are trying to learn from the headaches the European Union has had with emissions trading. For instance, in the E.U., the carbon market has collapsed during the recession, and so many countries are now experimenting with price floors.

The World Bank report also notes that many cap-and-trade programs are beginning to join together — California is partnering with Quebec, and the E.U. has joined up with Switzerland — which, in theory, should make it easier for companies to make the easiest cuts first. And many programs are trying to expand coverage. Australia and Korea are hoping to get 60 percent of their emissions covered, while California is aiming for 85 percent.

That said, the World Bank concludes that there hasn't been nearly enough progress to avoid the worst effects of global warming. "The current level of action puts us on a pathway towards a 3.5–4°C warmer world by the end of this century, [which] would threaten our current economic model with unprecedented and unpredictable impacts on human life and ecosystems in the long term."

What's more, many of these pricing programs could prove fleeting. In Australia, for instance, Liberal leader Tony Abbott has promised to dismantle the country's carbon law if his party gains power in the September elections (which is looking likely). So carbon pricing could just as easily shrink as expand in the years ahead.

Further reading:

--We’re on pace for 4°C of global warming. Here’s why that terrifies the World Bank.

--Europe's cap-and-trade program is in trouble. Here's a look at whether it can be fixed.

--Cap-and-trade is still alive in New England. Is it working?

--China may soon get a carbon tax. But not everyone's convinced it will be effective.

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Sarah Kliff · June 4, 2013