FACTBOX-Global climate schemes putting a price on carbon emissions
EUROPEAN UNION The world's largest ETS, which started out 16 years ago, is mandatory for all 27 EU members, plus Iceland, Liechtenstein and Norway, covering power plants, aviation, energy intensive industries. MEXICO A three-year pilot scheme was launched in 2020 covering the power, oil and gas, and industrial sectors.Reuters | Updated: 22-04-2021 23:04 IST | Created: 22-04-2021 22:57 IST
The United States, Japan and Canada announced more ambitious targets for reducing greenhouse gas emissions at a global climate summit on Thursday hosted by U.S. President Joe Biden, an event meant to spur big nations to combat global warming.
Faced with the challenge of converting pledges to slash planet-warming emissions into policies, some of the world's biggest economies are turning to the same tool: a carbon price. Globally, about 22% of global emissions are covered by the 46 national and 32 sub-national carbon pricing schemes operating today or in the planning stage, according to the World Bank.
Carbon pricing can come in the form of a tax or under an emissions trading, or cap-and-trade, scheme where companies or countries face a carbon limit. The concept of pricing emissions has gained significant corporate support in recent months. It also was mentioned by a number of speakers at the summit's first day, though they did not offer specific prescriptions for one global plan.
Marcie Frost, chief executive of the $450 billion California Public Employees' Retirement System called carbon pricing "essential to the markets to mitigate ongoing and future risk." Coupled with continued state subsidies to carbon-intensive industries, a lack of much carbon pricing currently is "giving a false positive on the investment risk and returns of carbon," she said.
Below are some of the major carbon emissions trading systems (ETS) around the world. BRITAIN
Britain launched a domestic ETS in 2021 after exiting the EU scheme following Brexit. It covers power plants, aviation, energy intensive industries. CHINA
A national ETS covering the power sector was launched in 2021 following pilot schemes in provinces and cities including Beijing, Chongqing, Guangdong, Hubei, Shanghai, Shenzhen and Tianjin. EUROPEAN UNION
The world's largest ETS, which started out 16 years ago, is mandatory for all 27 EU members, plus Iceland, Liechtenstein and Norway, covering power plants, aviation, energy intensive industries. KAZAKHSTAN
Its scheme, started in 2013. It was suspended 2016 and relaunched in 2018 after under going reforms. It covers the energy sector, mining and chemical industries. MEXICO
A three-year pilot scheme was launched in 2020 covering the power, oil and gas, and industrial sectors. NEW ZEALAND
Its ETS, which began in 2008, covers electricity generators, manufacturers liquid fossil fuels including petrol and diesel. Some forest owners are given free permits, others can voluntarily join the scheme. QUEBEC
Scheme was launched in 2012 and covers electricity, energy intensive industrials. SOUTH KOREA
ETS started in 2015. It covers around 600 of the biggest emitters, collectively responsible for almost 70% of the country's annual emissions. UNITED STATES
The United States does not have a national ETS, but many regions and states use carbon pricing, such as California and states covered by the Regional Greenhouse Gas Initiative (RGGI) - Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont. Sources: World Bank Group, International Carbon Action Partnership
(Reporting By Susanna Twidale in London and by Ross Kerber in Boston; Editing by Marguerita Choy)
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