Building on its original position, released in 2022, the Net-Zero Asset Owner Alliance (Alliance) launches an update featuring new data on the spread, coverage, and effectiveness of carbon pricing instruments globally.
The new findings reveal that 73 carbon pricing instruments have been implemented or scheduled as of 2023, covering 23% of world emissions. However, the instruments vary in price levels and those consistent with reaching Paris Agreement targets (at USD 80 per tonne) cover less than 5% of emissions.
The Alliance thus uses this updated position to reiterate its call to policymakers to follow through on their Paris Agreement commitments and integrate carbon pricing into their climate policy toolkits. The five design principles the Alliance recommends include:
- Ensuring appropriate coverage and ambition
- Delivering a just transition
- Providing a predictable price signal
- Minimising competitive distortions, and
- Promoting international cooperation.