State and Trends of Carbon Pricing 2024: World Bank report

Context:

World Bank’s State and Trends of Carbon Pricing 2024 report was released.

Key findings:

• Carbon Pricing revenues in 2023 exceeded USD 100 billion for the 1^st time.
• There are 75 global Carbon Pricing instruments in operation, covering around 24% of global greenhouse gas emissions.
• Brazil, India, and Türkiye have made notable progress towards Carbon Pricing implementation.
• China and India – Largest host countries in terms of issuances of Carbon Credits.

Carbon Pricing:

• An instrument that attaches a cost to greenhouse gas emissions, typically through CO₂ pricing mechanisms.
• Main types –
  • An emissions trading system (ETS):
    • A system where emitters can trade emission units to meet their emission targets.
    • Types of ETSs – Cap-and-trade systems and Base-line and credit systems
  • Carbon tax: It directly sets a price per unit of greenhouse gas emissions or carbon content.
• Benefits –
  • Place the burden of emissions damage on polluters.
  • Spur investment and innovation in clean technology.
  • Facilitate Paris Agreement emissions pathways for below 2°C/1.5°C warming.

Carbon Pricing at national level:

• In 2023, India introduced the Carbon Credit Trading Scheme (CCTS).
• Perform, Achieve and Trade (PAT) Scheme implemented by Bureau of Energy Efficiency (BEE).
• Clean Energy Cess of Rs.400/- per tonne of coal.

Carbon Pricing at Global Level:

• Carbon pricing took off under the Kyoto Protocol (1997) with three market-based mechanisms: International emissions trading (IET), the clean development mechanism (CDM) and joint implementation (JI).
• Article 6 of the Paris Agreement allows countries to transfer carbon credits earned from the reduction of Greenhouse Gas emissions.

Related Articles: Read here

Source: World Bank

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Previous Year Question

Consider the following activities:
1. Spreading finely ground basalt rock on farmlands extensively
2. Increasing the alkalinity of oceans by adding lime
3. Capturing carbon dioxide released by various industries and pumping it into abandoned subterranean mines in the form of carbonated waters
How many of the above activities are often considered and discussed for carbon capture and sequestration?

[UPSC Civil Services Exam – 2023 Prelims]

(a) Only one
(b) Only two
(c) All three
(d) None

Answer: (c)

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