The scheme points to increased pricing given the more aggressive emissions reductions ambitions and the introduction of the CBAM, in addition to market mechanisms to support higher pricing and the impact of carbon pricing as an emissions reductions tool. [...] The EU ETS, which we consider to be the global test case and indicator of the future direction of carbon pricing, points to increased pricing given the more aggressive emissions reductions ambitions and the introduction of the CBAM, in addition to market mechanisms to support higher pricing and the impact of carbon pricing as an emissions reductions tool. [...] To understand the economic impact of each additional tonne of carbon emissions, integrated assessment models (IAM) are used to predict the climate impact and economic cost of global warming, referred to as the social cost of carbon (SCC). [...] An IAM examines four key areas to determine the cost of carbon: future projections of GHG emissions; the effects of past and future emissions on the climate system; the impact of these changes; and translation of these into economic damages, discounted to a present value.34 Several SCC models are used to calculate emissions costs, namely the DICE, PAGE and FUND. [...] Add to this the key trading partners of the EU and those likely to be affected by the CBAM, the coverage increases to 83% with the additions of ‘major polluters’: the U.
Authors
- Pages
- 17
- Published in
- United States of America
Table of Contents
- Figures 2
- Figure 1: Revenue and Emissions Coverage of Carbon Taxes and ETSs, 1990-2023 7 2
- Figure 2: Free Allowance Phase-out and Introduction of the CBAM 11 2
- Figure 3: Carbon (CO2) Prices for Electricity, Industry and Energy Production in Selected Regions for the Net-Zero-By-2050 Scenario 13 2
- Figure 4Figure 6: Potential Carbon Pricing Emissions Coverage 16 2
- Tables 2
- Table 1: Q1 2023 Carbon Price Ranges and 2022 Global Revenue Raised (in US$) 9 2
- Key Findings 3
- Executive Summary 4
- Introduction 5
- The Use of Carbon Pricing Is Growing, and Growing Fast 6
- Figure 1: Revenue and Emissions Coverage of Carbon Taxes and ETSs, 1990-2023 7
- The Price of Carbon Under ETSs and Carbon Tax Schemes 8
- Table 1: Q1 2023 Carbon Price Ranges and 2022 Global Revenue Raised (in US$) 9
- The Start of an International Market? The Introduction of the Cross Border Adjustment Mechanism 10
- Figure 2: Free Allowance Phase-out and Introduction of the CBAM 11
- The Outlook for Carbon Prices 12
- Figure 3: Carbon (CO2) Prices for Electricity, Industry and Energy Production in Selected Regions for the Net-Zero-By-2050 Scenario 13
- Carbon Pricing Values Are Too Low to Account for the Damages of Climate Change or the Social Cost of Carbon 14
- Conclusions 15
- Figure 4: Potential Carbon Pricing Emissions Coverage 16
- About IEEFA 17
- About the Author 17
- Andrew Reid 17
