联合国贸易发展委员会-碳定价：一项发展和贸易现实检查（英）-2022.11-87正式版

DevelopingCountriesinInternationalTradeStudiesCarbonpricingAdevelopmentandtraderealitycheckDevelopingCountriesinInternationalTradeStudiesCarbonpricingAdevelopmentandtraderealitycheckGeneva,2022©2022,UnitedNationsAllrightsreservedworldwideRequeststoreproduceexcerptsortophotocopyshouldbeaddressedtotheCopyrightClearanceCenterat.Allotherqueriesonrightsandlicences,includingsubsidiaryrights,shouldbeaddressedto:UnitedNationsPublications405East42ndStreet,NewYork,NewYork10017UnitedStatesofAmericaEmail:publications@Website:/ThedesignationsemployedandthepresentationofmaterialonanymapinthisworkdonotimplytheexpressionofanyopinionwhatsoeveronthepartoftheUnitedNationsconcerningthelegalstatusofanycountry,territory,cityorareaorofitsauthorities,orconcerningthedelimitationofitsfrontiersorboundaries.ThispublicationhasnotbeenformallyeditedUnitedNationspublicationissuedbytheUnitedNationsConferenceonTradeandDevelopmentUNCTAD/DITC/TAB/2022/6ISBN:978-92-1-113083-6eISBN:978-92-1-002304-7SalesNo.E.22.II.D.51(ADVANCECOPY)ACKNOWLEDGEMENTSThispublicationisaproductoftheTradeAnalysisBranch,DivisiononInternationalTradeandCommodities(DITC),UnitedNationsConferenceonTradeandDevelopment(UNCTAD).MarcoFugazzawasresponsibleforthewritingofallchaptersunderthegeneralsupervisionofRalfPeters,Chief(OIC)oftheTradeAnalysisBranch.TheauthorisgratefulforinputsreceivedfromAlessandroNicitaandProf.JérémyLaurent-Lucchettiduringthepreparatorystageofthepublication.AlessandroNicita,JuliaGruebler,RobertHamweyandTansugOkprovidedinsightfulcommentsonthefinaldraftofthepublication.TheauthoralsothanksSarahBichotfortheeditingofthedocumentandJeniferTacardon-Mercadoforcarryingoutdesktoppublishingandforprovidingoveralllogisticalandadministrativesupport.iiiCarbonpricing:AdevelopmentandtraderealitycheckCONTENTSAcknowledgments iiiExecutiveSummary vi1.Introduction 12.Puttingapriceoncarbon:Whatisatstake? 52.1Scopeandobjectivesofcarbonpricing 62.2Theinternationalinstitutionalcontextforcarbonpricing 72.3Carbonpricinginpractice 103.Market-basedapproachestocarbonpricing:Theoreticalassessment 153.1Carbontaxes 163.2Carbonemissionstrading 223.3Acomparisonofcarbontaxesandemissionstrading 264.Market-basedapproachestocarbonpricing:Quantitativeandempiricalassessment 294.1Economicandenvironmentaleffectsofcarbonpricing 304.2Distributionaleffects 374.3Carbonleakage 414.4Globalvaluechains 434.5Carbonprices 445.Non-market-basedapproachestocarbonpricing 495.1Results-basedclimatefinancing 505.2Environmentalimpactbonds 505.3Internalpricing 515.4Subsidiesandcertification 536.Nationalandinternationalpoliciestoimprovecost-effectivenessofcarbonpricing 556.1Complementarityofpolicydesignandpolicyinstruments 566.2Directinvolvementoffirmsinmitigationefforts 586.3Politicalacceptability 596.4Internationalcoordinationandcooperation 60References 63ListofAnnexesAnnex1:CO2emissionsequivalences 74Annex2:Exanteassessmentofcarbonpricingimpactsindevelopingcountries 7ivContentsListofboxesBox1.Globalresponsetoclimatechange:somemilestone 7Box2.TheEuropeanUnioncarbonborderadjustmentmechanism(CBAM) 11Box3.Mainapproachestoassessingcarbonpricingimpacts 36ListoftablesTable1.SummaryofGHGemissionsin2019 2Table2.Maincarbonpricingschemesandinstruments 7Table3.Regional,nationalandsubnationalcarbonpricingandcreditinginitiatives,asof2022..11Table4.Effectsofcarbontaxation 22Table5.Majorcarbonoffsetandlabellingprogrammes 24Table6.Pricesinimplementedcarbonpricinginitiativesselected 46Table7.GHGscopesintheGHGProtocol 52ListoffiguresFigure1.Carbontaxandemissions 17Figure2.Carbonpricingandleakage:theproductionperspective 18Figure3.Carbonbordertax 20Figure4.Production-basedandconsumption-basedCO2emittedbyOECDandnon-OECDcountries 43Figure5.Carbonprices($/tCO2e)distribution:taxesversusETS,2021 45Figure6.OECDCarbonpricescore(€60/tCO2ereferencecost) 47Figure7.Carbonpricinginstruments 56vCarbonpricing:AdevelopmentandtraderealitycheckExecutiveSummaryThescientificevidencedrawsaclearpicture:Tolimitglobalwarmingto1.5°Cabovepre-industriallevels,GreenHouseGas(GHG)emissionsneedtopeakbefore2025andbereducedby43percentby2030,whilenetzeroemissionsneedtobeachievedgloballyintheearly2050s(IntergovernmentalPanelonClimateChange(IPCC)).Theinternationalclimatechangelegalframeworkisalsoclear.Itrequiresallcountriestoadoptclimatechangemitigationmeasuresinordertoachievethecommonobjectiveoflimitingtheincreaseinglobaltemperaturesto“wellbelow”2°Cbutleaveseachcountryfreetochoosethespecificmeasuresandpoliciestomeettheirindividualemissionsreductiontargets.ThisreportfocusesoncarbonpricingasonepolicystrandusedtotackleglobalGHGemissions.Itgivesanoverviewofimplementedandforthcomingdomesticandcross-bordercarbonpricingmechanisms,aswellastheirimplicationsforGHGemissions,internationaltradeanddevelopment.Itlaysoutthecharacteristicsofvariousapproaches,includingthepotentialpitfallsandunintendedeconomicandenvironmentalsideeffectswhichneedtobeaddressedfortheseapproachestowork.Carbonpricingcouldplayacoreroleinthetransitiontodecarbonizedeconomies.Climatechangehasdrasticandsizeableimpactsonalmostallaspectsofhumanlife.Itimposesconsiderablecostsanddisruptiverisksonbothcurrentandfuturegenerations,whichareonlyimperfectlyreflectedincurrentmarketprices.Themainobjectiveofcarbonpricingistoincreasethepriceofcarbon-emittingactivitiestoreflectthesocialcostofcarbonemissionsandtheresultingclimatechange.Bychangingthepricesofcarbon-emittinggoodsandservices,carbonpricinghasthepotentialtoshiftconsumptionandproductionawayfromGHG-intensiveactivitiestowardsmoresustainablealternatives.Thenumberofcountrieswhohaveadoptedcarbonpricingschemesisincreasing:In2022,46national/regionaland36subnationaljurisdictionshaveapriceoncarbon.Carbonpricinginitiativescoveratotalofalmost12gigatonnesofCO2emissionsin2022,whichcorrespondto23percentofglobalGHGemissions.Observedmediancarbonpricesare,however,stillmorethan50percentlowerthanthelevelsconsiderednecessarytoreachthe1.5°Cobjective.Domesticcarbonpricingschemescanhaveasignificantimpactoninternationaltrade.Carbonpricingisregardedasacost-effectivewaytoachieveemissionsreduction,andoneofthetwocommonlyconsideredpolicies(directregulationssuchasefficiencyrequirementsofelectricappliancesbeingthesecondalternative).Inpractice,domesticcarbontaxesandemissionstradingsystems(ETS)arethemostwidelyusedcarbonpricingschemes.However,areductionindomesticemissionsmaynotresultinareductionofglobalemissionsiftradingpartnersdonotadoptsimilarenvironmentalpolicies,resultingindomesticproductionbeingsubstitutedbymorecarbon-intensiveimports.Thiseffectcouldbeobservedifdomesticfirmsreacttotheestablishmentofadomesticcarbonschemebyrelocatingpartsoftheirproductiontolocationsapplyinglooseenvironmentalregulationsoriftheircompetitivenessisreducedandforeigncompaniesgainmarketshares.Thisriskofcarbonleakagehasincreasedovertimewiththeevolutionofglobalproductionchains.viExecutiveSummaryCarbonborderadjustmentschemesaimtofightthethreatofcarbonleakage.Intheabsenceofinternationalcoordinationoncarbonpricing,theimplementationofmeasuresatbordersmaycounternegativeeconomicandenvironmentalspillovers.Carbonborderadjustmentschemesareaspecialcategoryofcarbonpricingschemesandareconsideredbysometocomplementdomesticonesbytargetingimportsofcarbon-intensiveproducts.Suchcarbonborderadjustmentschemesallowforequivalentcarbonpricingforimportsanddomesticproducts.Similartotariffs,carbonbordertaxesaffectdomesticandforeignproduction,tradeflowsandgovernmentrevenues.Byraisingthepriceofimportedgoods,theylimitcompetitionfromgoodsproducedinlocationswithlowerorzerocarbonpricesandmayalsoaffectclimatepolicyimplementationinaffectedexportingeconomies.TheEuropeanUnion’sCarbonBorderAdjustmentMechanism(CBAM)isthefirstborderadjustmentschemetobeimplemented,andtargetsselectcarbonintensivesectors.Afteratransitionalgradualphase-inperiod,carboncertificateswillhavetobeacquiredwhichcorrespondtothecarbonpricethatwouldhavebeenpaidtoproducethegoodintheEuropeanUnion.ResultsfromsimulationsofthepossibleeffectsoftheCBAMsuggestthattheschemewouldaddressleakageandreduceemissions,butalsoleadtotradediversion:TradewithintheEuropeanUnionisexpectedtoincreasewhiletradeflowsoftradingpartnersaredivertedtootherregions.Developingcountriestotalexportsinthetargetedsectorsisexpectedtodeclinemorethanthatofdevelopedcountriessincedevelopedcountryproducers,asawhole,employlesscarbonintensiveproductionmethodsthantheirdevelopingcountrycounterparts.Complementarypoliciestocarbonpricingshouldcounteractrisinginequalityandincreaseitseffectiveness.Carbonpricingdoesnotaffectallagentsinaneconomyequally.Forexample,itcanaffectthepooresthouseholdstoagreaterextentifahighshareoftheirincomeisspentoncarbon-intensivegoodswhosepriceswillincreasefollowingtheintroductionofcarbonpricing.Furthermore,smallerfirmscouldbeimpactedmoreseverelybycarbonpricingschemesastheymaynotbeabletoinvestinlesscarbon-intensivetechnologiesandproductionprocesses.Therefore,complementarypoliciesshouldbeenvisagedtocounterthenegativedistributionaleffectsofcarbonpricing.Financialresourcesthataregeneratedbycarbonpricingschemescouldbeusedtoincentivizeinnovationandinvestmentinlow-carbon-intensiveactivitiesandalleviatetheimpactonlower-incomehouseholdsandcountries.Furthermore,existingevidenceshowsthatpriceincentivesarenecessarybutpotentiallyinsufficientmeasurestopromotebehaviouralchangesandreduceglobalwarming.Policiesaimedataffectingbehaviourthereforeneedtoincludeinformationandotherfeaturesontopofpriceincentivesinordertoincreaseacceptanceandsupport,andthuseffectiveness.Fossilfuelexportingcountriesfaceamultitudeofchallengesthatshouldnotbeneglected.Limitingglobalwarmingto1.5°Cabovepre-industriallevelswouldrequireleavingmorethanhalfoftoday’sfossilfuelreservesunextractedby2050.Countriesdependentonexportsofhydrocarbonswillloseamajorsourceofforeigncurrencyrevenues.Thisconcernsestablishedfuelexportersaswellasdevelopingandleastdevelopedcountries,whichhaveonlyrecentlydiscoveredfossilfuelresources.viiCarbonpricing:AdevelopmentandtraderealitycheckTheriskofstrandedassetscouldalsoleadtothe“GreenParadox”:Theanticipationofthefuturecollapseinthevalueoffossilfuelreservesmayresultinincreasedproductionandrelatedemissionsintheshortrun,therebyacceleratingglobalwarming.Couldcarbonpricingplayacoreroleinthetransitiontodecarbonizedeconomies?Withcoordinationamongstakeholdersandinternationalcooperationitcan!Carbonpricingcanbeeffectivewhenbroadeconomicactivitiesarepriced.Coordinationbetweeneconomicactorsincludingconsumersandprivatesectorcompaniesaswellasbetweencountriesisneeded.Giventheirgreaterexposuretoclimaterisks,developingandleastdevelopedcountriesmaygainsignificantlyfromglobalmitigationeffortsinthelongerrun.Intheshortrun,however,theymayhavelittlemeanstoundertakecostlyemissionreductions.Manydevelopingcountriesarenotabletoraisethenecessaryfundsdomesticallytopromotethetransitiontowardscleanertechnologiesandlackthenstitutionalcapacitytoimplementcarbonpricingschemessuchasemissionstradingsystems.Internationalcooperationisthereforecrucialtoglobalizeeffortstocombatglobalwarming.MoreadvancedcountriesshoulddeliverontheircommitmentsmadeinthenegotiatingroundsoftheConferenceoftheParties(COP)andmobilizeclimatefinancefundsforlessadvancedeconomiestohelpthemadopttechnologiesthattransitiontheireconomiestowardslowercarbonemissions.viiiChapter1IntroductionCarbonpricing:AdevelopmentandtraderealitycheckClimatechangeisusuallyassociatedwiththeclimaticconsequencesofaccumulationsofgreenhousegases(GHGs)intheatmosphere.Carbondioxide(CO2)hasbeenthemostprominentlyemittedGHGsinceinformationonemissionsstartedbeingcollected.Asshownintable1,itrepresentsaboutthreequartersofglobalannualGHGemissions.MethaneisthesecondmostprominentGHG,accountingforafurther17.5percentofglobalemissions.Nitrousoxides(N2O)andothergasesaccountfortheremainingGHGemissions.1Astoeconomicsectors,energyproductionisresponsibleforthelargestshareintotalGHGemissions(75percent)followedbyagriculture(13percent)andindustrialprocesses(4.5percent).WhiletheenergysectoremitsCO2(78percentoftotalemissions),agricultureaccountsforthelargestshareofmethane(44percentoftotal)andnitrousoxidesemissions(75percentoftotal)whileindustrialprocessesarethesoleemitteroffluorinatedgases.ThelargesteconomiesarealsothelargestemittersofGHGs.Chinareleasedabout12.7GtofCO2ein2019,followedbytheUnitedStatesofAmericawhichreleasedabout6GtofCO2e.Indiareleasedabout3.4GtofCO2e,theRussianFederation2.5Gt,Japan1.2GtandBrazil1.1Gt.Majoroilandnaturalgasesexportersarealsoamongthelargestemittersinpercapitaterms.Qataremittedabout40.5tonnesofCO2epercapitain2019,followedbyBahrain(33tCO2e/capita),Kuwait(32.5tCO2e/capita),Turkmenistan(26.5tCO2e/capita),theUnitedArabEmirates(25tCO2e/capita)andAustralia(23tCO2e/capita).2Table1SummaryofGHGemissionsin2019GasLevelinGigatonnesofCO2eShareinTotal(%)Carbondioxide(CO2)35.5173.8Methane(CH4)8.4217.5Nitrousoxides(N2O)3.006.25Fluorinatedgases(F-gas)1.182.45Total48.11100Source:Author’sownelaborationbasedonWorldResourcesInstituteClimateAnalysisIndicatorsTools(CAIT)dataset.Notes:Totalemissionsdonotincludeland-usechangeandforestryemissions(LUCF).CAITdatasetincludesallsectorsandgases,whichexplainsthethree-yearlag.Toemphasizecomparabilityofdataacrosscountries,itdoesnotusecountries’officialinventoriesreportedtotheUNFCCC.ThelinkbetweenGHGemissionsandglobalwarming,amajorreflectionofclimatechange,hasbeenestablishedbyclimatemodelsforseveraldecades(e.g.IPCC,1990;IPCC,2014;Collinsetal.,2013;EhlertandZickfeld,2017;HareandMeinshausen,2006;HerringtonandZickfeld,2014).Emissionsreductionisanecessityifglobalwarmingistobecontained.GHGemissionsaccumulateovertimeintheatmosphereandtheoveralleffectiscumulativeonclimatechange.Theeffectofpastcumulativeemissionsisalreadyvisible(astheplanethaswarmedby1degreeonaveragesincepre-industriallevels)andwillincreaseoverthenextfewyears.Tolimittheriseofglobaltemperaturetobelow1.5°Cabovepre-industriallevels,globalgreenhousegasemissionsmustbereduced45percentfrom2010levelsby2030andzeronetemissionsshouldbeachievedby2050(IPCC,2022).Climatechangeimposesconsiderablecostsanddisruptiverisksonbothcurrentandfuturegenerations.Itwillhavedrasticandsizeableimpactsonalmostallaspectsofhumanlife.TheWorldHealthOrganizationpredictsthatbetween2030and2050climatechangecouldcause250,000additionaldeathsperannumthroughmalnutrition,malaria,diarrhoea,andheatstressalone(WHO,2018).Italsohasimmensesocialandpoliticalimplications,includingsocialunrestandlarge-scaleconflicts(e.g.Burke,HsiangandMiguel,2014;HarrariandLaFerrara,2018)aswellasmassdisplacement(Rigaudetal.,2018).Theimpactontheeconomyisalsoexpectedtobesubstantial(AlvarezandRossi-Hansberg,2021).Climatechange12

Annex1providesCO2emissionsequivalencesforGHGslistedintable1.SeetheCAITcountrygreenhousegasemissionsdatasetfordetailsat/data/cait-climate-data-explorer.2CHAPTER1:Introductionwillresultinchangesincropyields,lossoflandandcapitalduetosealevelrise,capitaldamagesfromhurricanes,changesinfisheriescatches,labourproductivitychangesandtourismflows,changesinhealthcareexpendituresduetodiseasesandheatstress,andchangesinenergydemandforcoolingandheating.Currentlythecostsandrisksimposedbyclimatechangeareonlyimperfectlyreflectedinmarketprices.Furtherinternalizationofthesecostsisthusneededtoovercomethismarketfailure.Inthiscontext,carbonpricingcanplayakeyroleinthetransitiontoadecarbonizedeconomy.Thepurposeofcarbonpricingschemesistoaccountforthepriceofallcarbon-emittingactivities(reflectingthesocialcostofcarbonemissionsandclimatechange).Bychangingtherelativepricesofgoodsandservicesdependingontheircarboncontent,carbonpricingmechanismswillnaturallyshiftconsumptionandproductiontowardslessGHG–intensiveactivitiesandreduceGHGemissions.Carbonpricingisgenerallypresentedasahighlycost-effective3policyapproachtoachieveemissionsreduction(e.g.Auffhammeretal.,2016;Tietenberg,1990).However,carbonpricingmaygenerateoutcomesatboththedomesticandinternationallevelthatarenotnecessarilyreflectedincost-effectivenesscalculations.Domestically,carbonpricingcanleadtodistributionaltensions.Indeed,pricingemissionscanharmthepoorestsegmentsofthepopulationifahighshareoftheincomeofthesehouseholdsisspentoncarbon-intensivegoods(e.g.AnderssonandAtkinson2020;Fullerton,2011).Internationally,carbonpricingpoliciescaninfluenceinternationalcompetitiveness.Forexample,ifproductioncostsincreaseincountriesapplyingcarbonpricingschemes,firmsinthosecountriesmaysufferfromalossofcompetitivenessoninternationalmarketsandtheirexportpotentialcouldthusbenegativelyimpacted.Carbonpricingschemes,likeanyotherpolicyinstrumentorfeaturethataffectsproductioncosts,canhaveimportanttradeconsequences.Moreover,somefirmsmaydecidetorelocatetheirproductiontocountriesapplyinglooseenvironmentalpoliciestocircumventincreasesinproductioncosts.Ifsuchrelocationoccursalongglobalproductionchains,tradepatternsmaybedurablyimpacted.Toavoidcompetitivenessissues,allcountriesshouldimposesomekindofcarbonpricingschemetoforceeconomicagentstointernalizethecostoftheirGHGemissions.WithoutproperandeffectivecoordinationamongcountriesanyefforttocurbGHGemissionslocallywillbeinvainandmayevenresultinanincreaseinGHGemissionsglobally.Coordinationattheinternationallevel,however,remainsamajorchallengedespitecommitmentsrecentlymadebythePartiestotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC).Countrieswithmorestringentenvironmentalpoliciesandbindingcarbonpricingschemesmayhavetorelyonsecond-bestpolicies,suchascarbonborderadjustmentschemes,tooffsettheconsequencesofweakglobalcoordination.Carbonpricingschemescangeneratefiscalrevenuesandforthatreasonmayprevailoverpoliciesthatexclusivelyimposeemissions-relatedrestrictions.Revenuesfromcarbonpricingcanbeusedtosupportdecarbonization,especiallyifbudgetaryconstraintsaretight.Theycanbeusedtoreducethecostofemissionsabatement.Theycanalsobeusedtoeaseanyincomedistributionaltensionscreatedbycarbonpricing.ThissuggeststhatcarbonpricingshouldnotbetheonlyinstrumentofaclimatepolicypackageaimingateffectivelyreducingGHGemissions.Itshouldbepartofalargersetofpublicpoliciesdesignedtomonitorandaccompanythetransitionoffirmsandhouseholdstowardsanetzeroemissionseconomy.Publicresourcesmaybelackinggiventheconsiderablefinancialneedsofagloballysuccessfulenvironmentalpolicy.Inadditiontoglobalcoherenceofnationalenvironmentalpolicies,theinvolvementoftheprivatesectorcanbedecisiveinmobilizingprivatesavingsandfosteringtechnologicalinnovation.Carbonpricingwillundoubtedlyinduceareductionindemandforhydrocarbonsinthecomingyears.Becauseofthis,countriesdependentonexportsofhydrocarbonswillloseamajorsourceofforeignForagivenemissionreduction,apolicyiscost-effectiveifitachievesthisreductionatleastcost.Apolicyisefficientifitmaximizesnetbenefits,ortotalbenefitsminustotalcosts.3Carbonpricing:Adevelopmentandtraderealitycheckcurrencyrevenues.Ifnotanticipated,adrasticdropincurrencyrevenuesmayhavedramaticeconomiceffectsbeyondachangeinthecountries’tradepatterns.Therestofthisreportisorganizedasfollows.Chapter2presentssomebackgroundinformationaboutcarbonpricingrespectivelyfromaconceptual,institutional,andpracticalstandpoint.Chapter3reviewsthevariouscarbonpricingschemesthatcouldbeimplementedanddiscussestheirrespectiveexpectedimpactsandrelativemerits.Chapter4examinestheexistingempiricalevidencerelatingtothevariouscarbonpricingschemes.Itsmajorobjectiveistodefineasetofimpactdimensionsthatcouldbeconsideredthemostrelevantfromapolicyactionstandpoint.Chapter5reviewsnon-market-basedapproachestocarbonpricing.ThelastchapterexploresthevariouspoliciestobeimplementedinthisareatomitigateGHGemissionsaseffectivelyandefficientlyaspossible.4Chapter2Puttingapriceoncarbon:Whatisatstake?Carbonpricing:AdevelopmentandtraderealitycheckThischapterbrieflyreviewsthescopeandobjectivesofcarbonpricingfromaconceptualpointofview.Itthendiscussestheframingofcarbonpricingprinciplesattheinternationallevelanddescribestheirnationalcounterparts.2.1SCOPEANDOBJECTIVESOFCARBONPRICINGPricingcarboncanhelpinternalizethenegativeexternalitygeneratedbyGHGemissionsandobtainalevelofGHGemissionsthatreflectsthesocialcostofcarbon(seeannex1).Puttingapriceoncarbonisexpectedtoimpose,atleastpartially,theburdenforthedamagefromGHGemissionsonthoseresponsibleforthem(thepolluter-paysprinciple).ThequantitiesofGHG-intensiveactivitieswillthereforebereduced(astheirpricewillincreaserelativetonon-emittinggoodsandservices).Thecostofcarbonwillingeneralbesharedbetweenproducers(i.e.emitters)andconsumers.Theprecisedistributionofthecarboncostreflectsthebalancingofmarketpowerbetweenthesetwosetsofeconomicactorsaswellassomebehaviouralparameterssuchastherelativeelasticitiesofproductsupplyanddemand.GovernmentscanreducetheGHGcontentoftheservicestheyprovideandoftheinvestmentstheyfinance.Theymayalsobeabletointerveneexposttoinfluencecarboncostdistribution(e.g.throughbroaderredistributionpolicies).Acarbonpricecanbeeitherexplicitorimplicit.Whenitisexplicit,thecarbonpricereferstoCO2emissionsdirectlyandisexpressedintermsof“pertonneofCO2orCO2equivalent(CO2e)”emissions.Whenitisimplicit,thecarbonpriceisexpressedintermsofthequantity(i.einspecificform)orvalue(i.e.inadvaloremform)ofthetargetedproduct.ItsexplicitformwouldcorrespondtotheratiobetweenthetotalamountpaidforcarbonemissionsandthequantityofCO2emittedtoproducethetargetedproduct.Forexample,taxesimposedonpollutinggoodssuchasfuelsareoftenexpressedinunitsofthesegoods(e.g.perlitreoffuel)andnotperunitofCO2eemissions.Toobtainanexplicitcarbonprice,theamountofthetaxpaidperlitreoffuelwouldhavetobedividedbythequantityofCO2emittedbythecombustionofonelitreoffuel.Theimpactofacarbonpricewhetherexplicitorimplicitshouldbethesame.Itprovidesaneconomicsignaltoemitterswhocanuseittodecidetoeithertransformtheiractivitiesandlowertheiremissions,ortocontinueemittingandpayfortheiremissions.Consumersmayalsoreacttoanincreaseinpricesduetotheinclusionofthecarboncostbyeitherreducingtheirconsumptionorshiftingtheirconsumptionpreferencestowardslesscarbon-intensivegoodsandservices.Carbonpricingcanbeimplementedviaseveralpolicyschemesandinstruments,shownintable2.Adistinctionisusuallymadebetweencarbonpricinginstrumentsbasedonmarketmechanisms(e.g.carbontaxesandpermitmarkets)andcarbonpricinginstrumentsbasedonnon-marketmechanisms(command-and-controltypetools,labelsandinformation,orvoluntaryinitiatives).Carbontaxisusuallyperceivedasbeingbasedonamarketmechanismasitreliesonpriceadjustmenttoreducequantities.4Thepervasivenessofpricechangesduetocarbonpricingschemesdoesnotdependeitheronthetypeofschemeimplemented(i.e.carbontaxorpollutionpermitmarket)orontheeconomiclocationofthepricingscheme(i.e.moreupstreamordownstreamintheproductionprocessasthetaxwillautomaticallypassthroughthesupplychain).Severalinstrumentscanbeimplementedatthesametime.Forgovernments,thechoiceofcarbonpricingapproachshouldbebasedonnationalcircumstancesandpoliticalrealities.TheUNFCCCcategorizationdistinguishesbetweenmarket-basedapproachesandnon-market-basedapproaches.Intheformercaseemissionsrightsoroffsetscanbeexchangedonsomededicatedmarketsandanequilibriumpriceisdefinedexplicitly.Inthelattercase,noexchangeofemissionsrightsisexpected.Pricingoranyquantity-basedregulationsarepre-determinedbysomecentralcompetentauthority.6CHAPTER2:Puttingapriceoncarbon:Whatisatstake?Table2MaincarbonpricingschemesandinstrumentsMechanismInstrumentPriceMarketEmissionsTradingSystem(andderivatives)E