Box ES.1 / Carbon pricing in numbers

61 carbon pricing initiatives implemented/scheduled

46 national, 32 subnational jurisdictions

Covering 12 GtCO2e (22% of global GHG emissions)

US$45 billion raised in carbon pricing revenues in 2019

More than 14,500 registered crediting projects to date, generating almost 4 billion tCO2e of cumulative carbon credits

Forestry sector credits make up 42% of all credits issued in last five years

31 ETS and 30 carbon taxes

The large circles represent cooperation initiatives on carbon pricing between subnational jurisdictions. The small circles represent carbon pricing initiatives in cities.

Note: Carbon pricing initiatives are considered “scheduled for implementation” once they have been formally adopted through legislation and have an official, planned start date. Carbon pricing initiatives are considered “under consideration” if the government has announced its intention to work towards the implementation of a carbon pricing initiative and this has been formally confirmed by official government sources. The carbon pricing initiatives have been classified in ETSs and carbon taxes according to how they operate technically. ETS not only refers to cap-and-trade systems, but also baseline-and-credit systems as seen in British Columbia and baseline-and-offset systems as seen in Australia. The authors recognize that other classifications are possible.

ETS implemented or scheduled for implementation

Carbon tax implemented or scheduled for implementation

ETS or carbon tax under consideration

ETS and carbon tax implemented or scheduled

Carbon tax implemented or scheduled, ETS under consideration

ETS implemented or scheduled, ETS or carbon tax under consideration

ETS and carbon tax implemented or scheduled, ETS or carbon tax under consideration

Figure ES.1 / Carbon pricing initiatives implemented, scheduled for implementation and under consideration (ETS and carbon tax)

Ukraine

Norway

UK

Portugal

France

Switzerland

Slovenia

Montenegro

Poland

LatviaEstonia

Finland

Sweden

GermanyDen mark

Ireland

LiechtensteinCatalonia

Spain

Luxembourg

The Netherlands

Austria

Chile

São Paulo

TurkeyChina

Northwest Territories Canada

British Columbia

WashingtonOregon

California

Mexico

Brazil

Rio de Janeiro

South Africa

Australia

New Zealand

EU

KazakhstanRepublic of Korea

Japan

Iceland

Colombia

Argentina

Côte d’Ivoire

Senegal Thailand Vietnam

Indonesia

Shanghai

Shenzhen

Fujian

Beijing

Tianjin

HubeiChongqing

Guangdong

TokyoSaitama

Taiwan

Singapore

Prince Edward Island

Nova Scotia

SaskatchewanOntario

Québec

New Brunswick

Alberta

RGGI

Pennsylvania

Newfoundland and Labrador

TCI

Massachusetts

Virginia

Manitoba

Figure ES.2 / Share of global emissions covered by carbon pricing initiatives (ETS and carbon tax)

Note: Only the introduction or removal of an ETS or carbon tax is shown. Emissions are presented as a share of global GHG emissions from (EDGAR) version 5.0 including biofuels emissions. Annual changes in GHG emissions are not shown in the graph from 2015 onwards. In 2020, the Technology Innovation and Emissions Reduction Regulation (TIER) replaced the Alberta Carbon Competitiveness Incentive Regulation, which in 2018 had replaced the Alberta Specified Gas Emitters Regulation. The information on the China national ETS represents early unofficial estimates based on the announcement of China’s National Development and Reform Commission on the launch of the national ETS of December 2017.

Finland carbon tax (1990 ) Poland carbon tax (1990 ) Norway carbon tax (1991 ) Sweden carbon tax (1991 ) Denmark carbon tax (1992 ) Slovenia carbon tax (1996 ) Estonia carbon tax (2000 ) Latvia carbon tax (2004 ) EU ETS (2005 ) Alberta TIER (2007 ) Switzerland ETS (2008 ) New Zealand ETS (2008 ) Switzerland carbon tax (2008 ) Liechtenstein carbon tax (2008 ) BC carbon tax (2008 ) RGGI (2009 ) Iceland carbon tax (2010 ) Tokyo CaT (2010 ) Ireland carbon tax (2010 ) Ukraine carbon tax (2011 ) Saitama ETS (2011 ) California CaT (2012 )

Japan carbon tax (2012 ) Australia CPM (2012 - 2014) Québec CaT (2013 ) Kazakhstan ETS (2013 ) UK carbon price floor (2013 ) Shenzhen pilot ETS (2013 ) Shanghai pilot ETS (2013 ) Beijing pilot ETS (2013 ) Guangdong pilot ETS (2013 ) Tianjin pilot ETS (2013 ) France carbon tax (2014 ) Mexico carbon tax (2014 ) Spain carbon tax (2014 ) Hubei pilot ETS (2014 ) Chongqing pilot ETS (2014 ) Korea ETS (2015 ) Portugal carbon tax (2015 ) BC GGIRCA (2016 ) Australia ERF Safeguard Mechanism

(2016 ) Fujian pilot ETS (2016 ) Washington CAR (2017 )

Ontario CaT (2017 - 2018) Alberta carbon tax (2017 ) Chile carbon tax (2017 ) Colombia carbon tax (2017 ) Massachusetts ETS (2018 ) Argentina carbon tax (2018 ) Canada federal OBPS (2019 ) Singapore carbon tax (2019 ) Nova Scotia CaT (2019 ) Saskatchewan OBPS (2019 ) Newfoundland and Labrador carbon tax (2019 ) Newfoundland and Labrador PSS (2019 ) Canada federal fuel charge (2019 ) Prince Edward Island carbon tax (2019 ) South Africa carbon tax (2019 ) Northwest Territories carbon tax (2019 ) Mexico pilot ETS (2020 ) Virginia ETS (2020 ) New Brunswick carbon tax (2020 ) Germany ETS (2021 ) China national ETS (2021 )

1990

1992

1995

2000

1998

2003

2004

2005

1991

1994

1997

2002

1993

1996

2001

1999

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2018

2019

2020

2021

2017

25%

20%

15%

10%

5%

0%

Shar

e of

glo

bal a

nnua

l GH

G e

mis

sion

s

3738

41

2 4 5 6 7 8

Number of implemented initiatives

46 48

57

9 10 15 16 19 21

24

32

59

61

Figure ES.3 / Prices in implemented carbon pricing initiatives

Note: Nominal prices on April 1, 2020, shown for illustrative purpose only. The British Columbia GGIRCA, Canada federal OBPS, Kazakhstan ETS, Mexico pilot ETS, Nova Scotia CaT, Newfoundland and Labrador PSS, Saskatchewan OBPS and Washington CAR are not shown in this graph as price information is not available for those initiatives. Prices are not necessarily comparable between carbon pricing initiatives because of differences in the sectors covered and allocation methods applied, specific exemptions, and different compensation methods.

Carb

on p

rice

(US$

/tCO

2e) 120

110

100

90

80

70

60

50

40

30

20

10

0

119 Sweden carbon tax

68Finland carbon tax (transport fuels)

53 Norway carbon tax (upper)

49 France carbon tax

33 Korea ETS

30 Iceland carbon tax (fossil fuels)

99 Switzerland carbon tax, Liechtenstein carbon tax

58Finland carbon tax (other fossil fuels)

28 Ireland carbon tax (transport fuels), BC carbon tax

21Alberta TIER,

Canada federal fuel charge, Prince Edward Island carbon tax

7South Africa carbon tax

12Beijing pilot ETS

5

Chongqing pilot ETS,RGGI,

Shanghai pilot ETS,Chile carbon tax

3Norway carbon tax (lower),

Tianjin pilot ETS,Japan carbon tax

1

Argentina carbon tax (fuel oil, mineral coal and petroleum coke)

Fujian pilot ETS,Kazakhstan ETS

9Iceland carbon tax (F-gases)

15Québec CaT,California CaT

10 Latvia carbon tax

16 Spain carbon tax

UK carbon price floor, 22 Denmark carbon tax (F-gases), Ireland carbon tax (other fossil fuels)

Colombia carbon tax, Guangdong pilot ETS, 4 Hubei pilot ETS, Singapore carbon tax

Mexico carbon tax (upper), 2 Shenzhen pilot ETS, Estonia carbon tax

Argentina carbon tax (most liquid fuels), 6 Saitama ETS Tokyo CaT

Ukraine carbon tax, <1 Mexico carbon tax (lower), Poland carbon tax

Slovenia carbon tax 19 (fossil fuels), Switzerland ETS, EU ETS

8 Massachusetts ETS

Denmark carbon tax 26 (fossil fuels), Portugal carbon tax

Newfoundland and Labrador carbon tax, 14 New Zealand ETS, Northwest Territories carbon tax

Figure ES.4 / Carbon price, share of emissions covered and carbon pricing revenues of implemented carbon pricing initiatives

Note: Government revenues from carbon taxes, auctioned allowances and direct payments to meet compliance obligations. The size of the circles is proportional to the amount of government revenues except for initiatives with government revenues below US$100 million in 2019; the circles of these initiatives have an equal size. For illustrative purposes only, the nominal prices on April 1, 2020 and the coverages in 2020 are shown. The carbon tax rate applied in Argentina, Finland, Ireland, Mexico and Norway varies with the fossil fuel type and use. The carbon tax rate applied in Denmark and Iceland varies with the GHG type. The graph shows the average carbon tax rate weighted by the amount of emissions covered at the different tax rates in those jurisdictions. The middle point of each circle corresponds to the price and coverage of that initiative.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Share of GHG emissions covered in the jurisdiction

20

10

50

40

30

70

60

100

90

80

110

120

130

0

Carb

on p

rice

(US$

/tCO

2e)

RGGI

Canada federal

fuel charge

Japan carbon tax

Estonia carbon tax

Ireland carbon tax

Spain carbon tax

Switzerland ETS

Latvia carbon

tax

Massachusetts ETSPoland carbon tax

Argentina carbon tax

UK carbon price floor

Slovenia carbon tax

Colombia carbon tax

Liechtenstein carbon tax

Portugal carbon tax

Iceland carbon tax

Switzerland carbon tax

France carbon tax

Finland carbon tax

Chile carbon

tax

Sweden carbon tax

Denmark carbon tax

Prince Edward

Island carbon tax

Hubei pilot ETS

EU ETS

Mexico carbon tax

Newfoundland and Labrador carbon tax

Alberta TIER

New Zealand ETS

Norway carbon tax

BC carbon tax

Korea ETS

Ukraine carbon tax

Northwest Territories carbon tax

California CaT

Québec CaT

Carbon tax ETS

The large circles represent cooperation initiatives on carbon pricing between subnational jurisdictions. The small circles represent carbon pricing initiatives in cities.

Note: RGGI = Regional Greenhouse Gas Initiative. TCI = Transportation and Climate Initiative. Carbon pricing initiatives are considered “scheduled for implementation” once they have been formally adopted through legislation and have an official, planned start date. Carbon pricing initiatives are considered “under consideration” if the government has announced its intention to work towards the implementation of a carbon pricing initiative and this has been formally confirmed by official government sources. The carbon pricing initiatives have been classified in ETSs and carbon taxes according to how they operate technically. ETS not only refers to cap-and-trade systems, but also baseline-and-credit systems as seen in British Columbia and baseline-and-offset systems as seen in Australia. The authors recognize that other classifications are possible.

Initiatives implemented or scheduled for implementation: National ETSs: Australia, Austria, Belgium, Bulgaria, China, Croatia, Cyprus, Czech Republic, Germany, Greece, Hungary, Italy, Kazakhstan, Lithuania, Luxembourg, Malta, the Netherlands, New Zealand, the Republic of Korea, Romania, and Slovakia. National carbon taxes: Argentina, Chile, Colombia, Japan, Singapore, South Africa, and Ukraine. Both national ETSs and carbon taxes: Canada, Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Liechtenstein, Mexico, Norway, Poland, Portugal, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. Subnational ETSs: Beijing, California, Chongqing, Connecticut, Delaware, Fujian, Guangdong, Hubei, Maine, Maryland, Massachusetts, New Hampshire, New York, Nova Scotia, Québec, Rhode Island, Saitama, Saskatchewan, Shanghai, Shenzhen, Tianjin, Tokyo, Vermont, Virginia, and Washington State. Subnational carbon tax: New Brunswick, Northwest Territories, Prince Edward Island. Both subnational ETSs and carbon taxes: Alberta, British Columbia, Newfoundland and Labrador. Initiatives under consideration: National ETS or carbon tax: Austria, Brazil, Chile, Colombia, Côte d’Ivoire, Indonesia, Japan, Luxembourg, Montenegro, the Netherlands, Senegal, Thailand, Turkey, Ukraine, United Kingdom, and Vietnam. Subnational ETS and/or carbon tax: Catalonia, Manitoba, Ontario, Oregon, Pennsylvania, Rio de Janeiro, São Paolo, and Taiwan, China.

ETS implemented or scheduled for implementation

Carbon tax implemented or scheduled for implementation ETS or carbon tax under consideration

ETS and carbon tax implemented or scheduled Carbon tax implemented or scheduled, ETS under consideration

ETS implemented or scheduled, ETS or carbon tax under consideration

ETS and carbon tax implemented or scheduled, ETS or carbon tax under consideration

Figure 2.1 / Carbon pricing initiatives implemented, scheduled for implementation and under consideration (ETS and carbon tax)

Ukraine

Norway

UK

Portugal

France

Switzerland

Slovenia

Montenegro

Poland

LatviaEstonia

Finland

Sweden

GermanyDen mark

Ireland

LiechtensteinCatalonia

Spain

Luxembourg

The Netherlands

Austria

Chile

São Paulo

TurkeyChina

Northwest Territories Canada

British Columbia

WashingtonOregon

California

Mexico

Brazil

Rio de Janeiro

South Africa

Australia

New Zealand

EU

KazakhstanRepublic of Korea

Japan

Iceland

Colombia

Argentina

Côte d’Ivoire

Senegal Thailand Vietnam

Indonesia

Shanghai

Shenzhen

Fujian

Beijing

Tianjin

HubeiChongqing

Guangdong

TokyoSaitama

Taiwan

Singapore

Prince Edward Island

Nova Scotia

SaskatchewanOntario

Québec

New Brunswick

Alberta

RGGI

Pennsylvania

Newfoundland and Labrador

TCI

Massachusetts

Virginia

Manitoba

Figure 2.2 / Share of global emissions covered by carbon pricing initiatives (ETS and carbon tax)

Note: Only the introduction or removal of an ETS or carbon tax is shown. Emissions are presented as a share of global GHG emissions from (EDGAR) version 5.0 including biofuels emissions. Annual changes in GHG emissions are not shown in the graph from 2015 onwards. In 2020, the Technology Innovation and Emissions Reduction Regulation (TIER) replaced the Alberta Carbon Competitiveness Incentive Regulation, which in 2018 had replaced the Alberta Specified Gas Emitters Regulation. The information on the China national ETS represents early unofficial estimates based on the announcement of China’s National Development and Reform Commission on the launch of the national ETS of December 2017.

Finland carbon tax (1990 ) Poland carbon tax (1990 ) Norway carbon tax (1991 ) Sweden carbon tax (1991 ) Denmark carbon tax (1992 ) Slovenia carbon tax (1996 ) Estonia carbon tax (2000 ) Latvia carbon tax (2004 ) EU ETS (2005 ) Alberta TIER (2007 ) Switzerland ETS (2008 ) New Zealand ETS (2008 ) Switzerland carbon tax (2008 ) Liechtenstein carbon tax (2008 ) BC carbon tax (2008 ) RGGI (2009 ) Iceland carbon tax (2010 ) Tokyo CaT (2010 ) Ireland carbon tax (2010 ) Ukraine carbon tax (2011 ) Saitama ETS (2011 ) California CaT (2012 )

Japan carbon tax (2012 ) Australia CPM (2012 - 2014) Québec CaT (2013 ) Kazakhstan ETS (2013 ) UK carbon price floor (2013 ) Shenzhen pilot ETS (2013 ) Shanghai pilot ETS (2013 ) Beijing pilot ETS (2013 ) Guangdong pilot ETS (2013 ) Tianjin pilot ETS (2013 ) France carbon tax (2014 ) Mexico carbon tax (2014 ) Spain carbon tax (2014 ) Hubei pilot ETS (2014 ) Chongqing pilot ETS (2014 ) Korea ETS (2015 ) Portugal carbon tax (2015 ) BC GGIRCA (2016 ) Australia ERF Safeguard Mechanism

(2016 ) Fujian pilot ETS (2016 ) Washington CAR (2017 )

Ontario CaT (2017 - 2018) Alberta carbon tax (2017 ) Chile carbon tax (2017 ) Colombia carbon tax (2017 ) Massachusetts ETS (2018 ) Argentina carbon tax (2018 ) Canada federal OBPS (2019 ) Singapore carbon tax (2019 ) Nova Scotia CaT (2019 ) Saskatchewan OBPS (2019 ) Newfoundland and Labrador carbon tax (2019 ) Newfoundland and Labrador PSS (2019 ) Canada federal fuel charge (2019 ) Prince Edward Island carbon tax (2019 ) South Africa carbon tax (2019 ) Northwest Territories carbon tax (2019 ) Mexico pilot ETS (2020 ) Virginia ETS (2020 ) New Brunswick carbon tax (2020 ) Germany ETS (2021 ) China national ETS (2021 )

1990

1992

1995

2000

1998

2003

2004

2005

1991

1994

1997

2002

1993

1996

2001

1999

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2018

2019

2020

2021

2017

25%

20%

15%

10%

5%

0%

Shar

e of

glo

bal a

nnua

l GH

G e

mis

sion

s

3738

41

2 4 5 6 7 8

Number of implemented initiatives

46 48

57

9 10 15 16 19 21

24

32

59

61

Figure 2.3 / Prices in implemented carbon pricing initiatives

Note: Nominal prices on April 1, 2020, shown for illustrative purpose only. The British Columbia GGIRCA, Canada federal OBPS, Kazakhstan ETS, Mexico pilot ETS, Nova Scotia CaT, Newfoundland and Labrador PSS, Saskatchewan OBPS and Washington CAR are not shown in this graph as price information is not available for those initiatives. Prices are not necessarily comparable between carbon pricing initiatives because of differences in the sectors covered and allocation methods applied, specific exemptions, and different compensation methods.

Carb

on p

rice

(US$

/tCO

2e) 120

110

100

90

80

70

60

50

40

30

20

10

0

119 Sweden carbon tax

68Finland carbon tax (transport fuels)

53 Norway carbon tax (upper)

49 France carbon tax

33 Korea ETS

30 Iceland carbon tax (fossil fuels)

99 Switzerland carbon tax, Liechtenstein carbon tax

58Finland carbon tax (other fossil fuels)

28 Ireland carbon tax (transport fuels), BC carbon tax

21Alberta TIER,

Canada federal fuel charge, Prince Edward Island carbon tax

7South Africa carbon tax

12Beijing pilot ETS

5

Chongqing pilot ETS,RGGI,

Shanghai pilot ETS,Chile carbon tax

3Norway carbon tax (lower),

Tianjin pilot ETS,Japan carbon tax

1

Argentina carbon tax (fuel oil, mineral coal and petroleum coke)

Fujian pilot ETS,Kazakhstan ETS

9Iceland carbon tax (F-gases)

15Québec CaT,California CaT

10 Latvia carbon tax

16 Spain carbon tax

UK carbon price floor, 22 Denmark carbon tax (F-gases), Ireland carbon tax (other fossil fuels)

Colombia carbon tax, Guangdong pilot ETS, 4 Hubei pilot ETS, Singapore carbon tax

Mexico carbon tax (upper), 2 Shenzhen pilot ETS, Estonia carbon tax

Argentina carbon tax (most liquid fuels), 6 Saitama ETS Tokyo CaT

Ukraine carbon tax, <1 Mexico carbon tax (lower), Poland carbon tax

Slovenia carbon tax 19 (fossil fuels), Switzerland ETS, EU ETS

8 Massachusetts ETS

Denmark carbon tax 26 (fossil fuels), Portugal carbon tax

Newfoundland and Labrador carbon tax, 14 New Zealand ETS, Northwest Territories carbon tax

Figure 2.4 / Carbon price and emissions coverage of implemented carbon pricing initiatives

Note: The British Columbia GGIRCA, Canada federal OBPS, Kazakhstan ETS, Nova Scotia CaT, Newfoundland and Labrador PSS, Saskatchewan OBPS, and Washington CAR are not shown in this graph as price information is not available for those initiatives. The carbon tax rate applied in Argentina, Finland, Ireland, Mexico and Norway varies with the fossil fuel type and use. The carbon tax rate applied in Denmark and Iceland varies with the GHG type. The graph shows the average carbon tax rate weighted by the amount of emissions covered at the different tax rates in those jurisdictions.

Carbon tax ETS

130

120

110

100

90

70

60

50

30

20

10

0

Carb

on p

rice

(US$

/tCO

2e)

80

40

Cumulative emissions covered (MtCO2e)8,0007,0006,0005,0004,0003,0002,0001,0000

Prince Edward Island carbon taxCanada federal fuel charge

Slovenia carbon taxSwitzerland ETS

Sweden carbon tax

Finland carbon tax

Liechtenstein carbon tax

BC carbon taxIceland carbon tax

Denmark carbon taxPortugal carbon taxIreland carbon tax

UK carbon price floorAlberta TIER

Korea ETSNorway carbon tax

France carbon tax

Switzerland carbon tax

Shenzhen pilot ETSEstonia carbon tax

Mexico carbon tax

Argentina carbon tax (fuel oil, mineral coal and petroleum coke) Fujian pilot ETS

Kazakhstan ETSUkraine carbon tax

Poland carbon tax

Shanghai pilot ETS

Chongqing pilot ETS

Guangdong pilot ETS

Japan carbon tax

Colombia carbon tax

Hubei pilot ETS

RGGI

Singapore carbon taxTianjin pilot ETS

Chile carbon tax

Québec CaT

EU ETSSpain carbon tax

California CaT

New Zealand ETS

South Africa carbon taxMassachusetts ETS

Tokyo CaTArgentina carbon tax (most liquid fuels)

Saitama ETS

Beijing pilot ETS

Latvia carbon tax

Northwest Territories carbon taxNewfoundland and Labrador carbon tax

Australia ERF Safeguard Mechanism

Figure 2.5 / Carbon price, share of emissions covered and carbon pricing revenues of implemented carbon pricing initiatives

Note: The size of the circles is proportional to the amount of government revenues except for initiatives with government revenues below US$100 million in 2019; the circles of these initiatives have an equal size. For illustrative purposes only, the nominal prices on April 1, 2020 and the coverages in 2020 are shown. The carbon tax rate applied in Argentina, Finland, Ireland, Mexico and Norway varies with the fossil fuel type and use. The carbon tax rate applied in Denmark and Iceland varies with the GHG type. The graph shows the average carbon tax rate weighted by the amount of emissions covered at the different tax rates in those jurisdictions. The middle point of each circle corresponds to the price and coverage of that initiative.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Share of GHG emissions covered in the jurisdiction

20

10

50

40

30

70

60

100

90

80

110

120

130

0

Carb

on p

rice

(US$

/tCO

2e)

RGGI

Canada federal

fuel charge

Japan carbon tax

Estonia carbon tax

Ireland carbon tax

Spain carbon tax

Switzerland ETS

Latvia carbon

tax

Massachusetts ETSPoland carbon tax

Argentina carbon tax

UK carbon price floor

Slovenia carbon tax

Colombia carbon tax

Liechtenstein carbon tax

Portugal carbon tax

Iceland carbon tax

Switzerland carbon tax

France carbon tax

Finland carbon tax

Chile carbon

tax

Sweden carbon tax

Denmark carbon tax

Prince Edward

Island carbon tax

Hubei pilot ETS

EU ETS

Mexico carbon tax

Newfoundland and Labrador carbon tax

Alberta TIER

New Zealand ETS

Norway carbon tax

BC carbon tax

Korea ETS

Ukraine carbon tax

Northwest Territories carbon tax

California CaT

Québec CaT

Carbon tax ETS

Figure 2.6 / Carbon pricing initiatives implemented or scheduled for implementation, with sectoral coverage and GHG emissions covered

*

*****

****

Note: The size of the circles reflects the volume of GHG emissions in each jurisdiction. Symbols show the sectors and/or fuels covered under the respective carbon pricing initiatives. The largest circle (China) is equivalent to 13.2 GtCO2e and the smallest circle (Switzerland) to 0.05 GtCO2e. The carbon pricing initiatives have been classified in ETSs and carbon taxes according to how they operate technically. ETS does not only refer to cap-and-trade systems, but also baseline-and-credit systems such as British Columbia and baseline-and-offset systems such as in Australia. Carbon pricing has evolved over the years and they do not necessarily follow the two categories in a strict sense. The authors recognize that other classifications are possible.

The coverage includes the China national ETS and eight ETS pilots. The coverage represents early unofficial estimates based on the announcement of China’s National Development and Reform Commission on the launch of the national ETS of December 2017 and takes into account the GHG emissions that will be covered under the national ETS and are already covered under the ETS pilots. The sector symbol refers to the covered sectors in the national ETS or (one of the) ETS pilots. The national ETS will initially cover the power sector only. The covered sectors vary per ETS pilot.Also includes Norway, Iceland and Liechtenstein. Carbon tax emissions are the emissions covered under various national carbon taxes; the scope varies per tax.ETS emissions are the emissions covered under the Tokyo CaT and Saitama ETS. The coverage includes both components of the Canada federal backstop system and the subnational carbon pricing initiatives.

IndustryPower TransportAviation

BuildingsWasteForestryAgriculture

All fossil fuels (tax only)Solid fossil fuelsLiquid fossil fuelsShipping

ETS implemented or scheduled for implementationCarbon tax implemented or scheduled for implementationETS and carbon tax implemented or scheduledEstimated coverage%

Japan***

65%

2%Washington

67%

Massachusetts

20%

Virginia

30% 33%

11%

Switzer- land

Kazakhstan

50%

RGGI

18%

EU**

4%

49%

8% Ukraine

71%

Canada****

41%

34%70%

Republic of Korea

California

85%

Australia

50% 51%

New Zealand

80%

South Africa Singapore

80%

China*

33%

Argentina

20%

Chile

39%

Colombia

24%

Mexico

37%

46%

452 | Regional, national and subnational carbon pricing initiatives

Figure 3.1 / High-level example of how carbon crediting works

Implementation of emission reduction project

Issuance of carbon credits

Business as usual (BAU)Waste water plant, methane is being vented

BAU emissions

Time

Emis

sion

s

Emission reduction projectMethane captured and combusted to generate electricity

Time

Emis

sion

s Emission reductions eligible for crediting

Remaining emissions

BAU levels

Carbon credits generationCreation of carbon credits equal to the emissions reduced in tCO2

Time

Emis

sion

s Carbon credits can be sold as offsets or to determine RBCF payments

Carbon credits

Crediting mechanism

Figure 3.2 / Total credit issuance volumes by registry, sector, and region as of December 31, 2019

AlbertaB

ChinaC

SwitzerlandD

Republic of KoreaE

J-Credit SchemeBritish ColumbiaF

JCMQuébecG

GuangdongH

FujianI

RGGIBeijing J

ACR

Australia ERF

CaliforniaA

CAR

CDM

GS

JI

VCS

Agriculture

Forestry

Fuel switch

Industrial gases

Renewable energy

Transport

Waste

Manu facturing

CCS/CCU

Other land use

Fugitive emissions

Energy efficiency

East Asia & Pacific

East Asia & Pacific

Europe & Central Asia

Latin America & the Caribbean

North America

South Asia

Sub-Saharan Africa

Middle East & North Africa

A California Compliance Offset ProgramB Alberta Emission OffsetC China GHG Voluntary Emission Reduction ProgramD Switzerland CO2 Attestations Crediting Mechanism

E Republic of Korea Offset Credit Mechanism

F British Columbia OffsetG Québec Offset Crediting

H Guangdong Pu Hui Offset Crediting Mechanism

I Fujian Forestry Offset Crediting MechanismJ Beijing Forestry Offset Mechanism

Note: To ensure consistency between the information presented from the different crediting mechanisms, the cut-off date for the data on the crediting mechanisms is December 31, 2019. Only the largest independent carbon crediting mechanisms which issue credits that can be used for compliance obligations have been considered in this report. The authors recognize that numerous other independent crediting mechanisms exist that generate credits sold on the voluntary carbon market. Credits generated under the Saitama crediting mechanism, the Saitama forest absorption certification system, the Switzerland CO2 attestation crediting mechanism and Tokyo offset mechanism are not shown due to data limitations.

Figure 3.3 / Annual number of projects and issuances of covered crediting mechanisms for 2002–2019134

Annual volume of credit issuances Annual number of registered projects

Num

ber o

f pro

ject

s

Volu

me

(kto

n CO

2e)

1,000

2,000

3,000

4,000

0 0

200,000

400,000

600,000

1,000,000

800,000

2003

2004

2005

2002

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2018

2019

2017

134 Historical trends do not include mechanisms where chronological data on crediting activities are not available. These mechanisms are those under the Chinese pilot ETS’s (Beijing, Fujian and Guangdong), Tokyo ETS and Saitama ETS. The volume of credits involved are small and their exclusion does not impact the overall trends shown.

Figure 3.4 / Annual volume of issuances by crediting mechanism for 2015–2019

China GHG Voluntary Emission Reduction Program Republic of Korea Offset Credit Mechanism British Columbia Offset Program J-Credit Scheme Fujian Forestry Offset Crediting Mechanism Guangdong Québec Offset Crediting Mechanism Beijing Forestry Offset Mechanism RGGI JCM

CDM

JI

VCS

California Compliance Offset Program

GS

Australia ERF

CAR

Alberta Emission Offset System

ACR

Num

ber o

f pro

ject

s

100,000

50,000

150,000

200,000

250,000

0

2015

2016

2018

2019

2017

0

2015

2016

2018

2019

2017

0

2015

2016

2018

2019

2017

Figure 3.5 / Issuance volumes in ktonCO2e by sector and type of mechanism for 2015–2019

350,000300,000250,000200,000150,000100,00050,0000(kton CO2e)

Forestry

Renewable energy

CCS/CCU

Transport

Fuel switch

Industrial gases

Fugitive emissions

Energy efficiency

Agriculture

Other land use

Manufacturing

Waste

International Independent Regional, national, subnational

Figure 3.6 / Status of regional, national and subnational crediting mechanisms

Mexico crediting mechanism

South Africa crediting mechanism

Switzerland CO2 Attestations Crediting Mechanism

Kazakhstan crediting mechanism

Republic of Korea Offset Credit Mechanism

Canada GHG Offset System

China GHG Voluntary Emission Reduction Program

California Compliance Offset Program

J-Credit Scheme,JCM

Beijing Forestry Offset Mechanism

Fujian Forestry Offset Crediting Mechanism

Guangdong Pu Hui Offset Crediting Mechanism

Tokyo offset mechanism

Saitama crediting mechanism,Saitama forest absorption certification system

Washington State crediting mechanism

Alberta Emission Offset System

Québec Offset Crediting Mechanism

RGGI CO2 Offset Mechanism

British Columbia Offset Program

Nova Scotia crediting mechanism

Implemented

Under development

Australia ERF

Note: The large circles represent cooperation initiatives on crediting between subnational jurisdictions. The small circles represent crediting mechanisms in cities. JCM = Joint Crediting Mechanism. RGGI = Regional Greenhouse Gas Initiative. Implemented crediting mechanisms have the required legislative mandate as well as the supporting procedures, emission reduction protocols and registry systems in place to allow for cediting to take place. Crediting mechanisms are considered to be under development if they have legislature in place allowing for the future implementation of carbon crediting system but has currently not issued any credits either due to missing components such as registries and protocols. The authors recognize that numerous other independent crediting mechanisms exist that generate credits sold on the voluntary carbon market. Crediting mechanisms implemented: National: China GHG Voluntary Emission Reduction Program, J-Credit Scheme, Republic of Korea Offset Credit Mechanism, Switzerland CO2 Attestations Crediting Mechanism. Subnational: Fujian Forestry Offset Crediting Mechanism, Guangdong Pu Hui Offset Crediting Mechanism, Québec Offset Crediting Mechanism, Saitama crediting mechanism, Saitama forest absorption certification system, Tokyo offset mechanism. Crediting mechanisms under development: National: Canada GHG Offset System, Kazakhstan crediting mechanism, Mexico crediting mechanism, South Africa crediting mechanism. Subnational: Nova Scotia crediting mechanism, Washington State crediting mechanism.

Figure 4.1 / Status of net zero CO2 emissions targets by country241

Adopted in legislation

Achieved

Proposed in legislation

Suriname

Chile

Fiji

Spain

Bhut

an

Denm

ark

France

New Zealand

Sweden

Uni

ted

King

dom

241 110 countries which, as of April 1, 2020, are developing plans to achieve net zero CO2 emissions are not shown in this figure.

350 companies

427

408

176

206

294

296

67

61

50.1%Change internal behavior

58.4%Drive energy efficiency

61.1%Drive low-carbon investment

42.3%Identify and seize low-carbon opportunities

42.1%Navigate GHG regulations

29.5%Stakeholder expectations

25.2%Stress test investments

8.7%Supplier engagement

9.6%Other

Figure 5.1 / Objectives for implementing an internal carbon price305

305 CDP, CDP Disclosure 2019, https://www.cdp.net/en/climate/carbon-pricing/carbon-pricing-connect