The EDF-IETA report, “Doubling Down on Carbon Pricing: Laying the Foundation for Greater Ambition”, illustrates a number of possible routes for achieving the dramatic expansion of carbon pricing envisioned by the Panel. The report presents four scenarios for meeting both of the Panel’s targets, to increase carbon pricing coverage from the current level of 12% of global emissions to 25% in 2020, and doubling to 50% coverage in the next decade. The scenarios show that the Panel’s goals are ambitious, in the sense that they will require action beyond what is currently anticipated — especially to reach the 50% goal. At the same time, the report finds that the goals are achievable, given the existence of multiple plausible scenarios to meet them.
Carbon pricing creates a powerful economic incentive to reduce emissions at the lowest possible cost, generating momentum and impetus for more ambitious climate action. As a result, carbon pricing can play a critical role in meeting the objectives of the Paris Agreement by helping countries to implement their targets and cut emissions even more in the future. Nonetheless, simply expanding the coverage of carbon pricing will not meet long-run climate goals: the underlying policies must be sufficiently ambitious. The ultimate test of any climate policy is the emissions reductions it achieves.
EDF and IETA are partners of the Carbon Pricing Leadership Coalition. The Coalition brings together leaders from across government, the private sector and civil society to share experience working with carbon pricing and to expand the evidence base for the most effective carbon pricing systems and policies.
Download the report here.