Advancing Linked Carbon Pricing Instruments: Lessons on governing carbon pricing clubs from non-climate institutions
The implementation of the Paris Agreement is anchored in a wide variety of climate targets and domestic policies, captured in Parties’ Nationally Determined Contributions (NDCs) and intended to help countries meet the goals of the agreement. Economic instruments—and more specifically carbon pricing instruments (CPIs)—are increasingly considered as a key policy tool to reduce greenhouse gas (GHG) emissions.
In this report, IISD analyzes the possible development of innovative approaches to linking CPIs. If jurisdictions around the world are interested in enhancing cohesion between various CPIs, what kind of institution(s) might be designed—beyond or building on existing linked instruments like the Western Climate Initiative (WCI) and the Regional Greenhouse Gas Initiative (RGGI)—to aid their efforts? What cooperative arrangements would be best suited to develop common or reciprocal standards to ensure environmental integrity and robust accounting, share market infrastructure and allow members to share experiences? What governance models could help develop and oversee these types of cooperation?
This paper considers how carbon pricing club members could govern their interactions to ensure emissions reductions and raise their mitigation ambitions while keeping transaction costs low. However, unlike many studies conducted to date, we draw on examples from institutions that are not focused on carbon markets or climate change, the Organisation for Economic Co-operation and Development (OECD), the Asia-Pacific Economic Cooperation (APEC), the International Fuel Tax Agreement (IFTA) and the Missile Technology Control Regime (MTCR).
You might also be interested in
Rethinking Investment Treaties
The reports maps out how the treaty system can be redesigned from the bottom up to accelerate—rather than obstruct—genuine sustainable development and international cooperation.
Transitioning Away From Oil and Gas
At COP 28, 198 governments agreed to transition away from fossil fuels. What are the next steps for a global phase-out of oil and gas production?
Canada's greenhouse gas emissions climbed in 2022, after pandemic slowdown
Canada's greenhouse gas emissions rose in 2022, as the economy rebounded from the pandemic slowdown, according to new figures released by the federal government. The new National Inventory Report data shows emissions reached 708 megatonnes in that year, compared with 698 megatonnes in 2021. But Environment Minister Steven Guilbeault said the 2022 numbers are a sign his government's climate policies are working, with emissions totals the lowest in 25 years aside from the pandemic years.
Greenhouse-gas emissions falling, but oil-sands emissions continue to climb, federal report says
Federal climate policies have begun to make a dent in overall greenhouse-gas emissions, but oil-sands emissions continue to climb, raising questions about how the country can meet its overall targets as producers ramp up production to feed the Trans Mountain expansion system.