Carbon pricing mechanisms in 41 countries are not producing the carbon reductions needed to address climate change, according to a report Monday from the Organization for Economic Cooperation and Development. The report analyzes the carbon pricing mechanisms of 34 OECD member countries and seven OECD partner economies. “[T]here is a major gap between current carbon pricing policies and what is needed to ensure that carbon is priced even at the lower-end estimate of real climate costs – EUR 30 per tonne of CO2,” an OECD release says. The average carbon effective carbon rate across all countries studied is 14.4 euros per metric ton of CO2.
“This new data shows that even moderate collective action to increase carbon prices can make a significant impact in putting countries on a pathway to a low carbon transition,” OECD Secretary General Angel Gurría said in the release. “Pricing carbon, through taxes or emissions trading systems, is one of the most effective tools for reducing CO2 emissions and tackling climate change. Prices can and do trigger reductions of energy use, improvements in energy efficiency and a shift towards cleaner forms of energy. The challenge is in getting the prices right.”