The number of countries that have announced some type of commitment to net zero emissions has increased very rapidly in recent years, from five in 2018 to over 145 in 2023. Middle and low-income countries must therefore consider policies to both grow and decarbonize their power sectors. A growing number of them are considering carbon pricing instruments (CPIs). However, the path to implementing carbon pricing is fraught with challenges, including financing obstacles, the urgent need to boost supply, and social priorities different from those of more advanced economies with more carbon pricing experience. This report delves deep into the power sector value chain dynamics, demonstrating how well-designed carbon pricing instruments can be instrumental in helping countries reach their decarbonization goals. Focusing on how decisions are made in diverse power sector models in several developing countries, this report establishes that the CPI must be carefully positioned at the right regulation point in the power sector’s value chain—rather than merely adding a burden for the sector. Getting it right can influence everything from power generation options to investment decisions and customers’ behaviors.
Authors
World Bank, International Energy Agency (IEA), International Carbon Action Partnership (ICAP)
- Citation
- “ World Bank ; International Energy Agency (IEA) ; International Carbon Action Partnership (ICAP) . 2024 . Carbon Pricing in the Power Sector: Role and design for transitioning toward net-zero carbon development . © Washington, DC: World Bank . http://hdl.handle.net/10986/42091 License: CC BY-NC 3.0 IGO . ”
- Collection(s)
- Energy Study
- DOI
- https://doi.org/10.1596/42091
- Pages
- 22
- Published in
- United States of America
- Rights
- CC BY-NC 3.0 IGO
- Rights Holder
- World Bank Group
- Rights URI
- https://creativecommons.org/licenses/by-nc/3.0/igo
- UNIT
- CCG-CFE
- URI
- https://hdl.handle.net/10986/42091
- date disclosure
- 2024-09-09
- region geographical
- World
Files
Table of Contents
- CONTENTS 3
- ANNEX B CASE STUDY SNAPSHOTS 4
- ANNEX B.1 CHINA CASE STUDY 6
- POWER SECTOR CHARACTERISTICS 6
- CLIMATE POLICIES 9
- STATE OF CARBON PRICING 11
- FINDINGS ON THE EXPECTED IMPACT OF CARBON PRICING IN CHINAS POWER SECTOR 15
- ANNEX B.2 COLOMBIA CASE STUDY 17
- POWER SECTOR CHARACTERISTICS 17
- POWER SECTOR STRUCTURE AND VALUE CHAIN 19
- POWER SECTOR GOVERNANCE 20
- CLIMATE POLICIES 22
- STATE OF CARBON PRICING 23
- FINDINGS ON THE EXPECTED IMPACT OF CARBON PRICING IN COLOMBIAS POWER SECTOR 24
- ANNEX B.3 KAZAKHSTAN CASE STUDY 28
- POWER SECTOR CHARACTERISTICS 28
- POWER SECTOR STRUCTURE AND VALUE CHAIN 29
- POWER SECTOR GOVERNANCE 31
- CLIMATE POLICIES 32
- STATE OF CARBON PRICING 32
- FINDINGS ON THE EXPECTED IMPACT OF CARBON PRICING IN 33
- KAZAKHSTANS POWER SECTOR 33
- ANNEX B.4 SOUTH AFRICA CASE STUDY 37
- POWER SECTOR CHARACTERISTICS 37
- POWER SECTOR STRUCTURE AND VALUE CHAIN 39
- POWER SECTOR GOVERNANCE 40
- CLIMATE POLICIES 41
- STATE OF CARBON PRICING 42
- FINDINGS ON THE EXPECTED IMPACT OF CARBON PRICING IN SOUTH AFRICAS POWER SECTOR 45
- REFERENCES 49
