State and Trends of Carbon Pricing 2023 (English)

The global energy crisis posed significant challenges for energy markets and the world economy in 2022. Governments have responded with measures to shield consumers from price hikes, adding to fiscal pressures accumulated during the pandemic. In this context, the political economy of implementing direct carbon pricing policies has become more complex. On the one hand, the increasing urgency of addressing theclimate crisis, the benefits of diversifying energy supplies, and the need to shore up government revenues have provided an even stronger rationale for introducing new and strengthening existing carbon pricing policies. On the other hand, pressure on governments to consider any measures to reduce prices in the shortterm has been working against emissions trading systems (ETSs) and carbon taxes. This report provides an update on developments in existing and planned direct carbon pricing policies (e.g., ETSs, carbon taxes, and crediting mechanisms) over the past year, revealing how these contextual factors have affected prices,uptake, reform, and plans for these policies.