Gradually phasing out free allocation over 2026-2034 in the industries covered by the new carbon border adjustment mechanism.Gradually phasing out free allocation in the aviation sector by 2026.Increasing the sizes of the Innovation and Modernisation Funds.Updating parameters of the Market Stability Reserve, including a cancellation threshold of 400 million allowances and an extension of the intake rate of 24% until 2030.Rebasing the cap in two steps: in 2024 by 90 million allowances and in 2026 by 27 million.Raising the linear reduction factor to 4.3% for the period 2024-2027 and to 4.4% for the period 2028-2030.Increasing the level of emission reductions to be achieved by the EU ETS sectors by 2030 to 62% below 2005 levels.The agreement, among other things, includes: Now in its sixth year, the conference brings together leaders from government, business, policy, and finance to discuss innovative climate finance solutions.In December, the European Parliament and the Council of the EU reached a provisional agreement on the reform of the EU ETS as part of the negotiating process to deliver on the European Green Deal. The report was launched at Innovate4Climate, the World Bank Group's flagship annual event on climate finance, investment, and markets, held virtually this year from May 24 to 26. Key topics covered in the State and Trends of Carbon Pricing 2022 include cross-border approaches to carbon pricing, challenges and opportunities from rising energy prices, and new technologies and governance frameworks shaping carbon markets. “It is important now to build on this momentum and really ramp up both the coverage and the price levels to unlock the full potential of carbon pricing in supporting inclusive decarbonization.” “The past year has seen some very positive signs, such as the significant increase in revenue that can be invested in communities and in supporting the low carbon transition.There is also good progress towards resolving cross-border issues related to carbon pricing and the adoption of new rules for international carbon markets that was agreed at COP26 in Glasgow, which helps set a clearer policy direction," said Bernice Van Bronkhorst, Global Director for Climate Change at the World Bank. However, the report finds that less than 4 percent of global emissions are currently covered by a direct carbon price in the range needed by 2030 to meet the temperature goal of the Paris Agreement. Countries announcing plans for new carbon pricing policies include Israel, Malaysia, and Botswana.Ĭarbon prices hit record highs in many jurisdictions, including the European Union, California, New Zealand, the Republic of Korea, Switzerland and Canada. Four new carbon pricing instruments were implemented since the release of the 2021 State and Trends of Carbon Pricing report: one in Uruguay and three in North America (Ontario, Oregon, New Brunswick). The report, which presents the latest carbon pricing developments around the world, finds that there are 68 direct carbon pricing instruments operating today: 36 carbon taxes and 32 Emissions Trading Systems (ETSs). WASHINGTON, May 24, 2022- Global carbon pricing revenue in 2021 increased by almost 60 percent from 2020 levels, to around $84 billion, providing an important source of funds to help support a sustainable economic recovery, finance broader fiscal reforms, or invest in communities as part of the low-carbon transition future, according to the World Bank’s annual “State and Trends of Carbon Pricing” report released today. Global carbon pricing revenues increased by 60% over past year, according to latest World Bank report
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