Mapped: Carbon Pricing Initiatives Around the World
Over the past two decades, governments around the world have responded to climate change through various initiatives and policies, with carbon pricing at the forefront.
A recent example is the Canadian province of Ontario’s Emissions Performance Standards program, first launched in 2022. The program sets annual carbon emissions limits for industrial facilities, with a fee on excess carbon emitted.
This graphic by Jonathan Letourneau maps 70 active carbon pricing initiatives around the world and highlights their global impact as seen in the 2022 World Bank report.
But first, let’s look at the different types of carbon pricing:
Carbon Tax vs. ETS
Broadly speaking, carbon pricing gives emission generating organizations a choice between reducing their carbon emissions and paying for them.
The two typical initiatives used to offer this choice are carbon taxes and emissions trading systems (ETS):
- Carbon tax: This tax or levy is directly applied to the production of carbon emissions or fuels that release greenhouse gases. This makes products or services that release substantial carbon more expensive than greener alternatives (or reducing emissions).
- Emissions Trading System (ETS): Also called the cap-and-trade system, ETS puts a cap on the total level of greenhouse gases a licensed industry can emit. Companies with low emissions can sell their unused emission allowance with larger emitters that have exceeded the cap.
The World’s Carbon Pricing Initiatives
As of the end of 2022, Europe was home to 24 of the 70 active carbon pricing initiatives in the world.
|Location||Carbon Pricing Type||CO2e Price Per Tonne (USD)||Emissions Covered (Tonnes)|
|🇦🇷 Argentina||Carbon tax||$4.99||79.46|
|🇨🇦 Canada||Carbon tax||$39.96||167.67|
|🇨🇦 Canada - Alberta||ETS||$39.96||140.36|
|🇨🇦 Canada - British Columbia||ETS||$19.98||N/A|
|🇨🇦 Canada - British Columbia||Carbon tax||$39.96||46.41|
|🇨🇦 Canada - New Brunswick||ETS||$39.96||7.05|
|🇨🇦 Canada - New Brunswick||Carbon tax||$39.96||5.50|
|🇨🇦 Canada - Newfoundland and Labrador||ETS||$39.96||4.59|
|🇨🇦 Canada - Newfoundland and Labrador||Carbon tax||$39.96||5.01|
|🇨🇦 Canada - Northwest Territories||Carbon tax||$31.97||1.33|
|🇨🇦 Canada - Nova Scotia||ETS||$23.10||14.02|
|🇨🇦 Canada - Ontario||ETS||$31.97||41.12|
|🇨🇦 Canada - Prince Edward Island||Carbon tax||$23.98||0.97|
|🇨🇦 Canada - Quebec||ETS||$30.83||60.92|
|🇨🇦 Canada - Saskatchewan||ETS||$39.96||10.23|
|🇨🇱 Chile||Carbon tax||$5.00||36.93|
|🇨🇳 China - Beijing||ETS||$6.53||31.89|
|🇨🇳 China - Chongqing||ETS||$5.66||67.14|
|🇨🇳 China - Fujian||ETS||$1.83||125.13|
|🇨🇳 China - Guangdong (except Shenzhen)||ETS||$12.51||259.23|
|🇨🇳 China - Hubei||ETS||$7.24||63.80|
|🇨🇳 China - Shanghai||ETS||$9.28||78.48|
|🇨🇳 China - Shenzhen||ETS||$0.64||13.17|
|🇨🇳 China - Tianjin||ETS||$4.40||53.08|
|🇨🇴 Colombia||Carbon tax||$5.01||44.68|
|🇩🇰 Denmark||Carbon tax||$26.62||17.21|
|🇪🇪 Estonia||Carbon tax||$2.21||1.41|
|🇪🇺 EU - Norway, Iceland, Liechtenstein||ETS||$86.53||1,626.60|
|🇫🇮 Finland||Carbon tax||$85.10||26.93|
|🇫🇷 France||Carbon tax||$49.29||157.78|
|🇮🇸 Iceland||Carbon tax||$34.25||2.72|
|🇮🇪 Ireland||Carbon tax||$45.31||27.05|
|🇯🇵 Japan||Carbon tax||$2.36||952.66|
|🇯🇵 Japan - Saitama||ETS||$3.84||8.16|
|🇯🇵 Japan - Tokyo||ETS||$4.42||13.26|
|🇰🇷 Korea, Republic of||ETS||$18.75||554.44|
|🇱🇻 Latvia||Carbon tax||$16.58||0.38|
|🇱🇮 Liechtenstein||Carbon tax||$129.86||0.15|
|🇱🇺 Luxembourg||Carbon tax||$43.35||6.80|
|🇲🇽 Mexico||Carbon tax||$3.72||352.61|
|🇲🇽 Mexico - Baja California||Carbon tax||N/A||N/A|
|🇲🇽 Mexico - Tamaulipas||Carbon tax||N/A||N/A|
|🇲🇽 Mexico - Zacatecas||Carbon tax||N/A||N/A|
|🇳🇱 Netherlands||Carbon tax||$46.14||25.96|
|🇳🇿 New Zealand||ETS||$52.62||41.61|
|🇳🇴 Norway||Carbon tax||$87.61||44.73|
|🇵🇱 Poland||Carbon tax||N/A||15.94|
|🇵🇹 Portugal||Carbon tax||$26.44||25.04|
|🇸🇬 Singapore||Carbon tax||$3.96||56.42|
|🇸🇮 Slovenia||Carbon tax||$19.12||10.65|
|🇿🇦 South Africa||Carbon tax||$9.84||459.17|
|🇪🇸 Spain||Carbon tax||$16.58||6.23|
|🇸🇪 Sweden||Carbon tax||$129.89||25.83|
|🇨🇭 Switzerland||Carbon tax||$129.86||15.75|
|🇺🇸 United States - California||ETS||$30.82||309.47|
|🇺🇸 United States - New England Area (RGGI)||ETS||$13.89||67.92|
|🇺🇸 United States - New England Area (RGGI)||ETS||$0.50||6.07|
|🇺🇸 United States - Oregon||ETS||N/A||27.09|
|🇺🇦 Ukraine||Carbon tax||$1.03||197.46|
|🇬🇧 United Kingdom||Carbon tax||$23.65||97.38|
|🇬🇧 United Kingdom||ETS||$98.99||129.85|
|🇺🇾 Uruguay||Carbon tax||$137.30||4.38|
Europe’s position is not surprising given many of its countries have set ambitious carbon neutral goals. The region’s European Union Emissions Trading System (EU ETS) is the world’s largest carbon market, covering 1.8 billion tonnes of emissions annually.
Canada has also implemented numerous regional and national carbon pricing initiatives, with many provinces falling under both main types of carbon pricing. For example, carbon emissions in British Columbia—the first jurisdiction in North America to implement carbon pricing—are priced under both a carbon tax and an ETS.
Meanwhile, the world’s largest emitter of greenhouse gases in 2021, China, implemented its much-awaited national ETS the same year. In just one year, the country’s traded carbon emission allowances crossed 200 million tonnes.
In the U.S., several states have implemented their own carbon pricing initiatives. California’s cap-and-trade initiative covers emissions from electricity, transportation, and industry, while the Regional Greenhouse Gas Initiative sets a cap on emissions from power plants of nine Northeastern states, including New York, Massachusetts, and Pennsylvania.
The Impact of Carbon Pricing
Putting a price on carbon emissions seems to have made an impact in reducing emissions.
In Europe, the EU ETS has helped reduce emissions from the power sector by 43% in the region since its inception in 2005.
Likewise, California’s Cap-and-Trade program has helped the state meet its goal of reducing carbon emissions back to 1990 levels.
In many jurisdictions, including China and Canada, there are plans to double down on carbon pricing plans, either by increasing the cost of carbon or lowering emissions limits.
But while many economists and policy makers have found carbon pricing to be the most efficient tool to curb emissions, they also point out that the programs themselves need to be designed well. Initiatives with limits that are too high or prices that are too low can be ineffectual, as well as giving certain major polluters exemptions from programs.
This article was published as a part of Visual Capitalist's Creator Program, which features data-driven visuals from some of our favorite Creators around the world.
Life Cycle Emissions: EVs vs. Combustion Engine Vehicles
We look at carbon emissions of electric, hybrid, and combustion engine vehicles through an analysis of their life cycle emissions.
Life Cycle Emissions: EVs vs. Combustion Engine Vehicles
According to the International Energy Agency, the transportation sector is more reliant on fossil fuels than any other sector in the economy. In 2021, it accounted for 37% of all CO2 emissions from end‐use sectors.
To gain insights into how different vehicle types contribute to these emissions, the above graphic visualizes the life cycle emissions of battery electric, hybrid, and internal combustion engine (ICE) vehicles using Polestar and Rivian’s Pathway Report.
Production to Disposal: Emissions at Each Stage
Life cycle emissions are the total amount of greenhouse gases emitted throughout a product’s existence, including its production, use, and disposal.
To compare these emissions effectively, a standardized unit called metric tons of CO2 equivalent (tCO2e) is used, which accounts for different types of greenhouse gases and their global warming potential.
Here is an overview of the 2021 life cycle emissions of medium-sized electric, hybrid and ICE vehicles in each stage of their life cycles, using tCO2e. These numbers consider a use phase of 16 years and a distance of 240,000 km.
|Battery electric vehicle||Hybrid electric vehicle||Internal combustion engine vehicle|
|Production emissions (tCO2e)||Battery manufacturing||5||1||0|
|Use phase emissions (tCO2e)||Fuel/electricity production||26||12||13|
|Post consumer emissions (tCO2e)||End-of-life||-2||-1||-1|
|TOTAL||39 tCO2e||47 tCO2e||55 tCO2e|
While it may not be surprising that battery electric vehicles (BEVs) have the lowest life cycle emissions of the three vehicle segments, we can also take some other insights from the data that may not be as obvious at first.
- The production emissions for BEVs are approximately 40% higher than those of hybrid and ICE vehicles. According to a McKinsey & Company study, this high emission intensity can be attributed to the extraction and refining of raw materials like lithium, cobalt, and nickel that are needed for batteries, as well as the energy-intensive manufacturing process of BEVs.
- Electricity production is by far the most emission-intensive stage in a BEVs life cycle. Decarbonizing the electricity sector by implementing renewable and nuclear energy sources can significantly reduce these vehicles’ use phase emissions.
- By recycling materials and components in their end-of-life stages, all vehicle segments can offset a portion of their earlier life cycle emissions.
Accelerating the Transition to Electric Mobility
As we move toward a carbon-neutral economy, battery electric vehicles can play an important role in reducing global CO2 emissions.
Despite their lack of tailpipe emissions, however, it’s good to note that many stages of a BEV’s life cycle are still quite emission-intensive, specifically when it comes to manufacturing and electricity production.
Advancing the sustainability of battery production and fostering the adoption of clean energy sources can, therefore, aid in lowering the emissions of BEVs even further, leading to increased environmental stewardship in the transportation sector.
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