An Update on Carbon Pricing
Carbon pricing and emissions trading systems (ETS) have been gaining momentum as tools to reduce greenhouse gas emissions and meet Paris Agreement targets. The majority of OECD countries have a carbon pricing mechanism in place. China launched its nation-wide ETS in December. In the United States, California and Northeast states have been improving their carbon pricing programs, and additional states are discussing joining these efforts. Segments of the private sector have begun accounting for a price on carbon, particularly in risk assessment.
Despite progress, carbon pricing and ETS only cover approximately 15% of global emissions. The United States is still without a nation-wide carbon price, a politically fraught issue. Ultimately, prices must be significantly higher, and these mechanisms more widely adopted, in order to meet the goals of the Paris Agreement. Whether pricing carbon and ETS will come to meet expectations remains an open question.
This event is made possible by general funding to CSIS and the Energy & National Security Program.