Pricing Greenhouse Gas Emissions:Pricing greenhouse gas emissions: What has changed? What needs to change?

This chapter introduces carbon pricing and the current energy policy context. It then analyses changes in the pricing of greenhouse gas (GHG) emissions between 2018 and 2021 in 71 countries. The chapter takes a broad view of carbon pricing, considering both explicit forms of carbon pricing (emissions trading systems and carbon taxation) and implicit carbon pricing instruments that directly change fossil fuel prices (fuel excise taxes and negative carbon prices resulting from subsidies that lower pre-tax fossil fuel prices). Results are broken down by instrument, sector (road transport, off-road transport, industry, agriculture & fisheries and buildings, and other GHG emissions), country, fossil fuel, and GHG emissions percentile. The chapter presents estimates of the revenue potential of policy options for fossil fuel subsidy and carbon price reform, explains the link between carbon pricing and the sustainable development goals, and discusses how governments could unlock further mitigation efforts.