State and Trends of Carbon Pricing 2021

1 State and Trends of Carbon Pricing 2021. 2021 International bank for Reconstruction and Development / The World bank Adaptations If you create an adaptation of this work, please add the following dis- claimer along with the attribution: This is an adaptation of an original work by The 1818 H Street NW, Washington DC 20433 World bank . Responsibility for the views and opinions expressed in the adaptation rests Telephone: 202-473-1000; Internet: solely with the author or authors of the adaptation and are not endorsed by The World bank . Some rights reserved 1 2 3 4 24 23 22 21 Third-party content The World bank does not necessarily own each component of the content contained within the work.

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5 The World bank shall not be liable for any content or error in this translation. FOREWORD INTRODUCTION CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4 ANNEXES 2. The development of this report was led by the World bank and prepared by experts Global Environmental Bureau, Environment and Economy Division, Environmental Policy from the World bank and Climate Focus. Additional contributions were provided by the Bureau (Japan), Takuya Ozawa, Gareth Phillips, Margr t r lfsd ttir, Namita Rajesh, International Carbon Action Partnership and the Carbon Disclosure Project. the Regional Collaboration Centre (Kampala), Elizabeth Rine, Rajinder Sahota, Sufina Salleh, Anothai Sangthong, Arantzazu Mojarrieta Sanz, Ousamne Fall Sarr, Juan Pedro Ecosystem Marketplace and Sinocarbon Innovation & Investment also supported this Searle, Kristen Sheeran, Jessica Shirley, Chandra Shekar Sinha, ystein Bieltvedt Skeie, report.

6 Jason Smith, William Space, Sandhya Srivasan, Katie Sullivan, Heike Summer, Eva Suur- kaev, Nuyi Tao, Katherine Teeple, Lavinia Teodorescu, Michael Themann, Dino Toljan, The World bank task team responsible for this report was composed of Marissa San- Simon Tudiver, Priscilla Ulloa, Carolina Urmenata, M nica Leticia Lazcano Velasco, Da- tikarn, Angela Naneu Churie Kallhauge, Mustafa Ozgur Bozcaga, Leyla Sattler, Michael vid Victor, Teresa Solana Mendez de Vigo, Daniel Waluszewski, Philippe Wen, Brittany McCormick, and Ana Ferran Torres. White, Dina Yahya, Olga Yukhymchuk, Christopher Zink, and Gusts Zustenieks.

7 The Climate Focus team included Darragh Conway, Leo Mongendre, Carolina Inclan, Report design was done by Kynda and editing was done by EpsteinWords. Szymon Mikolajczyk, Lieke t Gilde, Imogen Long, Felipe Bravo, Federico De Lorenzo, and Adriaan Korthuis. This report was supported through the Partnership for Market Readiness Program. This report benefited greatly from the insights and contributions from: Malin Ahlberg, Keyongah Ahn, Erik van Andel, Botagoz Akhmetova, Jelena Ban, Imre Banyasz, Nicolet- te Bartlett, H l ne de Beer, Pierre Bouchard, David M. Brock, T mas Brynj lfsson, Cyril Cassisa, Marcos Castro Rodriguez, Petr Charnik, Sandeep Roy Chaudhury, Satoshi Chida, Mischa Classen, Ximena Aristizabal Clavijo, Tom Coleman, John Cooper, Hous- seini Coulibaly, Francisco Dall'Orso, the Department for Business, Energy and Indus- trial Strategy (United Kingdom), Department of Climate Change, Ministry of Natural Resources and Environment (Viet Nam), the Department of Finance (Government of the Northwest Territories, Canada), the Department of Finance (Ireland), Felipe Andres Diaz, Bill Drumheller, Virender K.

8 Duggal, Thomas Duchaine, Todd Dupuis, the East Afri- ca Alliance national focal points, Jane Ellis, Dominik Englert, Simon Fellermeyer, Hari- kumar Gadde, the GIZ Global Carbon Markets team (Uganda), Aric Gliesche, the Gover- nment of Argentina, the Government of Singapore, Jason Gray, Stephane Hallegatte, Sharlin Hemraj, Anukriti S. Hittle, Dmitry Halubouski, Aminul Haque, Keisuke Iyadomi, Syeda Hadika Jamshaid, Yuji Jigata, Olga Sanda Jur a, Brad Kerin, Krzysztof Koby ka, Anna Konovalov, Steven Kuski, Allen Landis, Jes s Abraham Bartolom Lasa, Teody Leano, Sungwoo Lee, St phane Legros, Lucas Lo Re, Pongvipa Lohsomboon, Memory Machingambi, Judy Meltzer, the Ministry of Environment and Climate Change Strategy (British Columbia), the Ministry for Environment and Parks (Alberta), the Ministry of Environment and Planning (Slovenia), the Ministry of Finance (British Columbia), the Ministry of Finance (Luxembourg)

9 , the Ministry of Finance (Slovenia), Antonio Morga- do, Daniel Nachtigall, Nives Nared, Lucy Naydenova, the Office of Market Mechanisms, FOREWORD INTRODUCTION CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4 ANNEXES 3. LIST OF FIGURES. Figure Figure Carbon Pricing landscape 17 Credit issuance and number of projects registered by mechanism 41. Figure Map of Carbon taxes and emissions trading systems 22 Figure Volumes transacted and prices per sector (2019) 43. Figure Share of global greenhouse gas emissions covered by Carbon Figure taxes and emissions trading systems 23 Map of domestic crediting mechanisms 44.

10 Figure Figure Carbon prices as of April 1, 2021 26 article 6 pilots by stage of development and sector 50. Figure Figure 2020 Allowance price developments in emissions trading Motivations for internal Carbon Pricing 53. systems 27. Figure Figure Internal Carbon Pricing across industries 57. Carbon price, coverage and revenues generated by Carbon taxes 29 Figure Credits issued, registered activities, average 2020 price and Figure sectors covered by crediting mechanisms 75. Carbon price, coverage and revenues generated by emissions trading systems 30. Figure Cumulative credit issuance of credits (2019-2020) 40.