Efforts to put a value on greenhouse-gas emissions to contain global warming are being hurt as countries from Australia to Russia and Japan pull back from carbon-reduction commitments, according to the World Bank.
“While some nations are taking concrete steps forward on carbon pricing, recent developments in others are a setback,” the World Bank said in its State & Trends of Carbon Pricing 2014 report published today. Policy changes amount to “two steps forward, one step back,” it said.
Greenhouse-gas emissions covered by pricing mechanisms such as taxes and trading programs may fall to 12 percent from 18 per cent if countries including Ukraine and Kazakhstan don’t ratify an extension of the 1997 Kyoto climate accord, the bank said. Russia, Japan and New Zealand renounced the emission-reduction pact’s second commitment period covering the eight years through 2020.
Carbon pricing is needed to boost private-sector investment in clean energy projects at a time when public funding is limited, the World Bank said in its report. Forty countries and more than 20 sub-national jurisdictions have put a price on carbon, according to the lender.
“Progress across the globe is steady,” it said, citing eight new markets in 2013. They include cap-and-trade markets in California and Quebec as well as emissions trading programs in China.
Carbon trading
Emissions trading programs worldwide were worth about $30 billion at the end of 2013, according to the bank, which excluded United Nations emissions credits created under the Kyoto Protocol. The value of global carbon markets, based on transaction volumes and including UN credits, fell 36 per cent last year to about $56 billion, Bloomberg New Energy Finance data show.
Costs between pricing programs “occupy a significant range,” the bank said. An emissions tax in Mexico is less than $1 a metric tonne of carbon dioxide equivalent, while Sweden’s carbon tax is $168 a tonne, according to the report.
The EU carbon benchmark closed up 0.6 per cent today at 5.25 euros ($7.14) a ton on the ICE Futures Europe exchange in London. The contracts have dropped 81 per cent since 2008.
Australia’s new government is seeking to dismantle legislation that levies fees on carbon emissions and replace it with taxpayer funded grants to companies and projects that reduce emissions. Russia said last month that the UN-endorsed goal of capping rising global temperatures shouldn’t dictate countries’ emission limits in a new climate treaty for 2020.
