CARBON PRICING FOR A SUSTAINABLE FUTURE

(CRITICAL REVIEW)

Submitted by:

ANKIT KUMAR SAHA

IBEF_1802
 Introduction
Climate change poses one of the greatest global challenges and threatens to roll back decades
of development and prosperity. Greenhouse gases are those gases which trap heat in the
atmosphere. Gases like carbon dioxide (CO2), methane (CH4), nitrous oxide (N20), etc. are
classified as greenhouse gases. They have been a major increase in these emissions since the
1800s, i.e., during the industrial revolution. Worldwide, net emissions of greenhouse gases as
a result of human activities increased by 35 percent from 1990 to 2010. Emissions of carbon
dioxide, which account for about three-fourths of total emissions, saw a rise by 42 percent over
this period. The main sources of carbon dioxide are transportation and electricity production,
followed by industries and household. Land areas on average have already warmed by 1.3°C
because of these emissions. At current emission rates, there will be enough CO2 to warm land
areas by 2°C within 3 decades.
To tackle this, the Paris Agreement was formed in the 21st conference of the United Nations
Framework Convention on Climate Change (UNFCCC) in the year 2015 which was addressed
by 195 state parties. The main objective of this agreement is to limit this temperature rise within
2 degrees from the time before industrial revolution through mitigation of the greenhouse gas
emissions. The agreement also takes care of the adaptation, financing and transparency through
regular reporting. The main motive has been to reduce CO2 emissions and carbon pricing is a
method adopted by the member parties to tackle the rising temperature due to greenhouse gases.

Carbon-Pricing
Carbon pricing is a method that captures the external costs of the greenhouse gas emissions,
i.e., the cost of emission which is paid by the public through channels like damage to crops,
healthcare expenses due to heat waves and droughts, property loss from floods or sea-level rise,
etc. and ties them to the source through a price, which is usually in the form of a price on the
CO2 emitted. So, this pricing is like a shift of burden of the social damage produced due to
these emissions back to those who are emitting them in the first place and those who can avoid
it. It is indirectly directing the masses to shift to other energy sources which is supposed to be
more effective, flexible and less costly compared to dictating people to follow certain rules and
regulations to reach the overall environmental goal.
There is a growing consensus among governments and business entities regarding this
transition to decarbonized economy and carbon pricing plays a fundamental role. For
governments, carbon pricing is essential to combat climate change and it serves as a source of
revenue as well. Carbon pricing has been modulated with the future in mind as it is supposed
to add to the dynamics of the economy. Carbon pricing may be a forerunner towards a shift
from the carbon market to the renewable energy sector.
There are 57 carbon pricing initiatives implemented or scheduled for implementation which
covers 46 national jurisdictions and 28 subnational jurisdictions. In 2019, these initiatives will
cover 19.6% of the total greenhouse gas emissions which amounts to 11 giga tons of CO 2
equivalent.
The carbon pricing comes in many shapes which can be differentiated as below:
• An emissions trading system (ETS) is a system where emitters can trade emission
units to meet their emission targets. This is mainly a quantitative method of reducing
greenhouse gases emissions and can be divided into two main types: Cap and Trade
system and Baseline and Credit systems.
• A carbon tax directly sets a price on carbon by defining an explicit tax rate on
greenhouse gas emissions or on the carbon content of fossil fuels more commonly, i.e.
a price per tCO2e (ton CO2 equivalent). It is different from an ETS in that the emission
reduction outcome of a carbon tax is not pre-defined but the carbon price is.
• An offset mechanism designates the greenhouse gas emission reductions from project
or program-based activities, which can be sold either domestically or in other countries.
Offset programs issue carbon credits according to an accounting protocol and have their
own registry. These credits can be used to meet compliance under an international
agreement, domestic policies or corporate citizenship objectives related to greenhouse
gas mitigation.
• RBCF is a funding approach where payments are made after pre-defined outputs or
outcomes related to managing climate change, such as emission reductions, are
delivered and verified. Many RBCF programs aim to purchase verified reductions in
greenhouse gas emissions while at the same time reduce poverty, improve access to
clean energy and offer health and community benefits.
• Internal carbon pricing is a tool an organization uses internally to guide its decision-
making process in relation to climate change impacts, risks and opportunities.
Jurisdictions which are implementing regional, national and subnational carbon pricing
initiatives have been exploring modalities for cooperation and knowledge sharing, which could
lead to further regional convergence of carbon pricing, alignment and linking. For example,
California, Mexico, Ontario and Québec have signed Memorandums of Understanding to
explore options to cooperate on carbon markets. In addition, dialogues have been taking place
in the context of the Pacific Alliance with a view to consider possible voluntary market
mechanisms in the region. Furthermore, China, Japan and Korea initiated an annual conference
to exchange experiences on carbon pricing and discuss areas for cooperation, and on the other
hand, New Zealand started discussing potential collaboration with China and Korea on carbon
markets. Japan also continues to work with other countries to reduce greenhouse gas emissions
through its Joint Crediting Mechanism. Such cooperative developments will support the cost-
effective achievement of a 2°C or lower climate target, as demonstrated by modelling that
shows that an international carbon market could deliver a 30 percent reduction in global
mitigation costs by the year 2030 and more than 50 percent reduction by the middle of the
century.
On average, the emissions covered by carbon pricing initiatives implemented and scheduled
for implementation is about half of the greenhouse gas emissions of jurisdictions with an ETS
and/or a carbon tax. This translates to a total cap over about 8 GtCO2e or about 15 percent of
global greenhouse gas emissions. Emissions covered under the carbon pricing scheme have
increased almost four times over the past decade. In April 2016, the High-Level Panel on
Carbon Pricing, a group of government leaders and international organizations, set forward a
global target to double the emissions covered by carbon pricing initiatives to 25 percent by
2020 and to double this coverage again within a decade.
According to World Bank, the observed carbon prices span a wide range, from less than US$1
up to US$140/tCO2e. About three quarters of covered emissions remain priced at less than
US$10/tCO2e, which is substantially lower than the price levels that are consistent with
achieving the temperature goal of the Paris Agreement, identified by the High-Level
Commission on Carbon Prices to be in the range of US$40–80/tCO2e in 2020 and US$50–
100/tCO2e by 2030. Also, the Carbon Pricing Corridors initiative, which is led by CDP and
We Mean Business, projects that price levels of US$50–100/tCO2e by 2030 are needed to
decarbonize the power sector. Currently, only the carbon taxes in Finland, Liechtenstein,
Sweden and Switzerland have carbon price rates that are consistent with the 2020 price range
recommended by the High-Level Commission on Carbon Prices. If all existing carbon pricing
initiatives adopted carbon prices that are in line with the temperature goal of the Paris
Agreement, the government revenues raised would increase from US$22 billion in 2016 to
more than US$100 billion per year.
It’s not just governments that are joining the carbon-pricing stampede. There are more than
1,400 companies globally, including some of the world’s largest multinationals which are
voluntarily integrating carbon prices into their investment decisions, according to CDP (a non-
profit that gathers environmental data from companies and governments). Like, suppose, an oil
company decides whether to drill in a certain field or a bank decides whether to loan to a certain
project, it first tries to calculate what would happen to its profits if the government imposed a
particular carbon price. In theory, doing this should lead companies to favour less carbon-
intensive investments.
Carbon pricing has done two important things. It has accustomed powerful economic players—
governments, companies, and, to a deeper extent, consumers—to the notion that they will have
to integrate decarbonization into their spending decisions. In the process, it has urged those
actors to put more effort into discovering both the technologies and the business models that
would most cost-effectively cut carbon emissions to an environmentally meaningful extent.

Above, we find the rate of carbon pricing over the world that has been implemented or yet to
be implemented. We can see that only six places have applied carbon pricing at the required
rate, Sweden being the topper in this scenario. Most of the impositions are way below the
required rate to tackle climate change.
This marks only a bad picture over the world’s contribution in combatting greenhouse gas
emissions. There should be more severe taxation, at least to reach the required threshold so
that greenhouse gas emissions can be slowed and the climate change can be restricted to certain
extent because it’s already too late.
Above is a graph which shows the amount of global greenhouse gas emissions that has been
capped under carbon pricing till 2018.
Though the share has increased many folds over the years, but it is not enough compared to the
growth in the global emissions. More and more emissions should be capped and that too
efficiently and the pricing has to be right. Following, we will see how different regions have
been walking in the paths of carbon pricing and what are the results they generated.
Sweden
Starting from July 1, 2018, Sweden introduced an emission reduction obligation scheme for
fuels like petrol and diesel to promote low blending of biofuels and at the same time, the carbon
tax for petrol and diesel with low blending of biofuels will be reduced. The reason for the
reduction is that the carbon tax rate will be calculated on the basis of the fossil-based carbon
content of the fuel. Regulations are introduced which require fuel distributors and large
consumers to lower greenhouse gas emissions by blending biofuels into petrol and diesel to
reach an emission reduction which is equivalent to 2.6 percent for petrol and 19.3 percent for
diesel in 2018, compared to the full carbon content of petrol and diesel normally.
The government plans to increase this obligation, with the goal of having a 40 percent reduction
of emissions from petrol and diesel through biofuel blending by 2030. Fuels which have a high
biofuel share are outside the scope of the obligation scheme and will have exemption from the
carbon tax. Since January 1, 2018, previously exempted emissions from combined heat and
power plants that are also covered by the EU ETS are being taxed at 11 percent of the full tax
rate. The tax level for other heat production covered by the EU ETS also increased from 80
percent to 91 percent of the full rate, while industrial facilities covered by the EU ETS are still
entirely exempt from the carbon tax. Furthermore, since January 1, 2018 the carbon tax rate on
industrial facilities not covered by the EU ETS became aligned with the general tax rate. Prior
to this date, a lower tax rate was applied to these facilities.
Switzerland
The Switzerland carbon tax increased on January 1, 2018 from CHF84/tCO2e (US$88/tCO2e)
to CHF96/tCO2e (US$101/tCO2e), when a government review found that Switzerland’s
greenhouse gas emissions were higher than the targeted levels for 2016. The Swiss government
has put forward a proposal that would further increase the maximum possible carbon tax rate
from CHF120/tCO2e (US$126/tCO2e) to CHF210/tCO2e (US$221/tCO2e) if emission
reductions targets are not met. Similar to the current regulation, the proposal also defines
intermediate emission reduction targets. This would lead to biannual increases of the tax rate
if targets are not met, meaning the new maximum tax rate could be reached at the earliest in
2028.
Norway
On January 1, 2018, the full carbon tax rate in Norway increased to NOK500/tCO2e
(US$64/tCO2e), and most exemptions and reduced carbon tax rates were abolished.
Exemptions from the carbon tax are still applicable to some sectors, including agriculture and
waste incineration, while a reduced carbon tax rate still applies for fisheries. Government
appointed committees are investigating the possibility of introducing a carbon tax on
agricultural emissions, increasing the carbon tax rate on fisheries, or alternative measures to
reduce GHG emissions in these two sectors. The Government is also considering whether waste
incineration should be subject to the EU ETS or a carbon tax.
Australia
Since its launch in 2015, the ERF has contracted 438 projects against a cost of A$2.28 billion
(US$1.75 billion) to deliver 191 MtCO2e of emissions abatement over 2015–2029. With a total
size of A$2.55 billion (US$1.96 billion), about 90 percent of the ERF has been allocated. In
the first year of compliance under the ERF Safeguard Mechanism (2016–17), facility operators
surrendered around 448,000 Australian Carbon Credit Units to offset emissions above their
baselines.
Following a review of climate change policies in 2017, the Australian government is currently
consulting industry on potential changes to the ERF Safeguard Mechanism to bring baselines
up-to-date with current circumstances and make it fairer and simpler. The government is
planning to have any changes made to the Safeguard Mechanism take effect in the 2018/19
compliance year. In its review of climate change policies, the government also stated its in-
principle support for the use of international units to meet emission reduction targets. The final
decision on international units will be made by 2020.115
Canada
The pan-Canadian approach to carbon pricing requires all Canadian provinces and territories
to have a carbon pricing initiative in place in 2018 that aligns with the federal standard. The
federal standard provides provinces and territories the flexibility to implement their own carbon
pricing initiative according to their circumstances—either a fixed price or cap-and-trade
system—and sets common criteria that all systems must meet, in order to ensure they are fair
and effective. The federal standard aims to ensure that carbon pricing will apply to a broad set
of emission sources throughout Canada, with increasing stringency over time.
The federal government also committed to develop and implement a federal carbon pricing
backstop system in any province or territory that requests it or that is not on track in 2018 to
adopt a carbon pricing initiative that meets the federal standard. The carbon pricing backstop
system would take effect in these jurisdictions on January 1, 2019. The proposed backstop
system consists of two elements: a carbon tax that is generally payable by fuel producers or
distributors, and a baseline-and credit ETS for emissions-intensive, trade-exposed industrial
facilities.
The carbon tax would cover a broad range of fossil fuels (including various liquid, solid, and
gaseous fuels) and combustible waste at a rate of CAN$20/tCO2e (US$16/tCO2) in 2019,
increasing annually by CAN$10/tCO2e (US$8/tCO2e) to reach CAN$50/tCO2e (US$39/tCO2e)
in 2022. The federal ETS—called the output-based pricing system—will cover industrial
facilities emitting 50 kilotons of carbon dioxide equivalent (ktCO2e) per year or more, and over
time, other smaller facilities will be able to opt-in to the system. The emissions limit for
industrial facilities will be calculated based on an emissions intensity standard and the facility’s
annual output or production. A facility whose emissions are above its limit can meet its
compliance obligation by surrendering surplus credits purchased from facilities whose
emissions are below their limit, surrendering eligible offsets credits, and/or paying a charge to
the Government of Canada at the same rate as the carbon tax element (e.g. CAN$50/tCO2e in
2022).
 Short-Comings of Carbon Pricing
Sector-wise Limitations
Carbon pricing squeezes certain sectors more than others because it works well for industries
that require a lot of fossil energy, that have technologies available to them to reduce that energy
use, which can’t simply relocate to places wherever energy is cheaper. In other words, it works
well in the power and heating sector, which accounts for about 25 percent of global emissions.
That industry is usually dominated by localized utilities that can curb their carbon emissions in
a number of ways: by switching to a more efficient equipment for burning fossil fuels, by
shifting from higher-carbon fossil fuels such as coal to lower-carbon ones such as natural gas,
by increasing their use of renewable energy, by capturing the carbon dioxide they produce and
sequestering it, or by incentivizing their customers to waste less electricity.
Carbon pricing tends not to work well for curbing emissions from buildings, which generate
about six percent of global emissions. Builders seldom occupy the buildings they build, which
suggests they don’t pay the energy bills and therefore have very little incentive to foot the cost
of capital of a lot of economical buildings. Nor will carbon evaluation work well to curb
emissions from transportation, that account for concerning fourteen percent of the world total.
Studies show that drivers are sometimes unresponsive to modest will increase in hydrocarbon
and diesel taxes. And though they are reply to huge hikes, taxes that top tend to be political
disadvantages. No wonder, then, that carbon-pricing regimes tend not to tamp down emissions
from buildings and vehicles.
Just as the breadth of a carbon-pricing system matters, so does the price it puts on each metric
ton of carbon dioxide. (Even within the unlikely event that the 195 nations that have in
agreement below the accord to voluntarily constrain their carbon outputs met their guarantees,
that wouldn’t stop global temperatures from surpassing the two-degree threshold.) But of the
global emissions now subject to a carbon price, just one percent are priced at or above the
commission’s $40 floor of ecological relevance. Three-quarters are priced below $10. The
upshot: over 2 years when the ostensible watershed moment of Paris, only a mere 0.15 percent
of global greenhouse gas emissions are subject to a carbon price that economists deem high
enough to make much of an environmental difference.
Four countries have priced carbon at or above that $40 floor, according to the World Bank:
Finland, Liechtenstein, Sweden, and Switzerland. These are made nations with an ingrained
culture of environmental protection. They also have, by global standards, comparatively low-
carbon electricity systems, thanks in large part to plentiful hydropower and, in the cases of
Finland, Sweden, and Switzerland, a great deal of nuclear power, too. All told, they couldn’t
be more different from the kinds of places—China, India, Africa, and the rest of the world
which is developing—that most matter in the fight against climate change.
In case of private firms too, however, the reality is underwhelming. To withdraw the energy
system enough to fulfil even the restricted goals set in Paris, annual global investment in low-
carbon technologies would have to rise by about $700 billion by 2030, according to the World
Bank. The bank conjointly estimates that a world carbon market may incentivize concerning
third of that—about $220 billion annually. That figure in itself is telling that even under the
rosiest of circumstances, carbon pricing will produce only a fraction of the emission cuts
needed to put the world onto a sufficiently low-carbon path.
Inefficient Pricing
How a strategy which is widely seen as so promising has failed to live up to its ideal is a tale
of good intentions restricted by economic and political realities. Europe’s experience is
instructive. Launched in 2005, the EU’s emission-trading system was designed to cover
electricity generators and energy-intensive industries such as cement and steel production. But
from the beginning, the companies the system had under it got plentiful free permits. It meant
that only those companies that experienced unexpected rises in emissions had to pay much for
the right to pollute.
When the 2008 global financial crisis hit the economy, European activity declined, and so did
emissions. Companies had with them, more free permits than they needed, and European
carbon prices tanked, from more than 25 euros per metric ton in 2008 to less than 5 euros in
2013. In recent years, the EU has toughened the system somewhat; among other things, it has
required more companies to buy more of their permits, and it has spread the system wide to
cover airline flights within the EU. But the permits are still very cheap, that the program is not
reducing emission reductions in line with the long-term carbon-reduction goals that it has set.
Between 2015 and 2016, EU emissions fell by 0.7 percent across the bloc—enough to keep the
EU on track to meet its goal of cutting emissions to 20 percent below 1990 levels by 2020, but
not enough, officials have admitted, to meet the EU’s more ambitious commitment of reducing
them to 80 percent below 1990 levels by 2050. And as of 2017, emissions covered by the EU’s
carbon-pricing system actually rose, for the first time in seven years which has been the result
of stronger than expected industrial output.
Last year, the EU agreed to redesign its carbon-pricing system after recognizing significant
flaws in it. The new version, set to take effect in 2021, is supposed to tighten emission limits,
reduce handouts of free permits, and cleaning excess permits off the market if their price falls
below a certain level. But the reforms are probably too little, too late. The price of permits had
risen a lot last year, from about eight euros in January to about 14 euros in mid-May. Although,
some analysts have predicted that their price will average only about 18 euros per metric ton
in 2020, about half the price that the World Bank says will be necessary to make a significant
effect in reducing carbon emissions. In a November 2017 report, the Mercator Research
Institute on Global Commons and Climate Change, a Berlin-based organization, cited
persistently low permit prices when it warned that the EU’s carbon-pricing system is “in a
crisis.”
California, the world’s sixth-largest economy, has had similar problems. Although it produces
only about one percent of global greenhouse gas emissions, it has long been a leader when it
comes to environmental policy, imposing regulations that were later adopted across the country
and around the world. The state launched a cap-and-trade system for carbon in 2012, part of a
broader plan to cut its emissions to 1990 levels by 2020.The goal is less ambitious compared
to the EU’s but more ambitious than the U.S. federal government’s. California is all but sure
to meet that target. What’s more, as an analysis released last year by Near Zero, a non-profit
research group in California, concluded, the decline in power plant emissions owes little to
carbon pricing. Instead, it is due to the product of an increased use of hydropower and a greater
production of wind and solar power which were imposed as state mandates. As of mid-May,
California’s carbon price was around $15 per metric ton. It was that low because factors other
than the carbon market led power producers to curb their emissions, leaving companies with
extra permits which they received from the state for free.
In theory, returning to consumers’ money raised from a carbon price should be popular,
handing policymakers political opportunities to impose a carbon price high enough to make a
difference on climate change. But in reality, even this idea faces opposition from the interests
that would be hit hardest by the carbon price. British Columbia implemented a revenue-neutral
carbon price in 2008 and initially saw its emissions drop. But in 2012, amid political blowback,
the province froze its carbon price, at 30 Canadian$ per metric ton. As expected, emissions
started rising again. Last spring, British Columbia raised the carbon price to 35 Canadian
dollars per metric ton which is lower than a government advisory panel suggested was
important. Thus, showing inefficiency in carbon-pricing.
China’s Participation
China, the world’s factory floor and most populous country, is the most important piece in
solving the climate change puzzle. Unless it cuts down its carbon emissions, little that the rest
of the world contributes in the climate fight will not matter much. Being the world’s largest
producer of both coal-fired power and renewable energy and with its powerful central
government, it is possible for China to execute a carbon-pricing revolution. In 2013 and 2014,
after analysing the European and Californian examples, China introduced carbon-pricing tests
in five cities and two provinces. And in 2015, Chinese President Xi Jinping announced with
great fanfare that China would soon take carbon pricing to the whole nation.
As has been the case elsewhere, carbon pricing is unlikely to reduce carbon emissions
dramatically in China. The beginning of a decline in carbon output from the world’s biggest
emitter will not be enough to fix climate change; what’s necessary is for total global emissions
to plunge. Moreover, assuming that China’s emissions do in fact peak, which seems likely,
they will do so in response to broad changes in the economy that have next to nothing to do
with a price on carbon. Those changes, specially, improvements in the energy efficiency of
manufacturing and reductions in emissions from coal-fired power plants will be driven
primarily by economic and public health priorities. Indeed, in the pilot programs that China has
rolled out in various localities, carbon in mid-May was trading at between about $2 and $9 per
metric ton which is too low for a meaningfully change in the behaviour of companies or general
public.
Ineffective Tools
Seriously addressing climate change in the immediate future demands, a theoretically effective
strategy will not be enough, but an actually effective one is required. That’s because with every
passing year, more carbon accumulates in the atmosphere, and more global warming becomes
inevitable. Cutting down emissions in the near term is crucial. But in 2017, global energy-
related carbon emissions rose for the first time in four years. The 1.4% rise was due to an
increase in coal use, particularly in Asia, and a combined slowdown in worldwide energy-
efficiency improvements, the result of cheap fossil fuel.
Finding an economically and politically viable way to capture and store carbon from fossil
fuel consumption is crucial not just for electricity production but also for industrial processes
such as cement and steel production. These activities emit huge quantities of carbon dioxide,
and for now, there is no viable way to power them other than the use of fossil fuels. But
efforts to develop CCS (Carbon capture and storage) technology have stalled as carbon
pricing has stumbled, because of absence of a strong government push to reduce carbon
emissions, companies also find no reason to spend money on it. Experts estimate that a
carbon price well above $100 per metric ton, and perhaps much higher, would be needed to
create enough of an incentive for firms to invest in large-scale CCS. Given that a carbon price
that high anytime soon seems to be an unfeasible dream, governments will have to provide
more direct financial support for the technology.
Compared with the electricity sector, transportation is harder to decarbonize. True, electric cars
will likely proliferate as their cost continues to fall, and if powered by clean electricity, they
could become a major climate-fighting tool. But batteries come too expensive, and it will likely
take decades to replace the fleet of vehicles already on the road. So, oil will, according to most
projections, continue to power most transportation until the middle of the century and perhaps
well beyond it. For the foreseeable future, then, the key is to minimize the wasteful
consumption of oil.
These are the major short-comings faced around the world. There are more problems some of
which are not yet addressed. Mitigation of these problems should be of first priority, at least
the major identified short-comings should be addressed with utmost urgency
 Conclusion
Carbon pricing is essential and maybe one day it will be the best tool to tackle climate change,
but we don’t have much time in hand. To the extent it is being implemented, carbon pricing
won’t get expected results in the near future, so the target below 2°C is at stake and if the
temperature crosses the 2°C mark, it might lead to some permanent damage to Earth. Although
there are certain positive results, but that is limited to certain areas that have sufficient resources
to backup these modulations. Major emissions now are concentrated among the emerging
economies, so policies need to be introduced which are more integrated and rigorous, so that
climate change can be fought effectively with special emphasis to shifting towards cleaner
energy sources because it is estimated that greenhouse gas emissions are going strong till at
least 2040s. Sturdy actions have to be taken and they have to be taken now.
Policy Suggestions
There should be stricter imposition of carbon tax and it should be implemented efficiently.
There should be channelling of the revenues generated from carbon taxation towards restoring
the environment. The revenue can be used to develop other sources of energy, like solar, wind
and hydro power. The greater need is to confirm a substitute to daily source of energy
worldwide. There should be public awareness regarding the horrors of climate change and
provision for subsidies to use of cleaner forms of energy. This way the required rate of tax can
be imposed where it will not just limit greenhouse gas emissions but also encourage shift
towards other renewable sources of energy.
Most of the greenhouse gas emissions are concentrated among developing countries like India.
It might be a good opportunity to introduce newer, efficient and cleaner technologies.
Infrastructural development in sectors like power plants are necessary to strengthen the
prospects of alternative energy sources. Policies need to be framed that aim at a shift from
carbon market to its alternatives, which make sure that there is no adverse effect in the economy
and also move forward in the steps of sustainable development.
Political scenario of a nation is also a concern when it comes to taxation, i.e. concerns fiscal
decisions. Corruption has been a major reason for failure of carbo pricing as politicians have
trouble in imposing a big tax burden on the citizens for the fear that it will work against their
favour. There can be more active participation by the international institutions in the economies
where they work within the economy on their own terms mostly and maintain complete
transparency with the governments they are dealing with. Mutual trust and cooperation will be
a key.
There is an urgent need to curb greenhouse gas emissions and prevent climate change and big
steps have to be taken to ensure that. As Ban Ki-Moon said, “We have no plan B as there is no
Planet B.” There is no time to stall. Climate change is to be prevented and it has to start now.
 References

• Alex, and Sam. “Low-Carbon Development for the Least Developed Countries.”
Grantham Research Institute on Climate Change and the Environment,
www.lse.ac.uk/GranthamInstitute/publication/low-carbon-development-for-the-least-
developed-countries/.
• Anonymous. “EU Emissions Trading System (EU ETS).” Climate Action - European
Commission, 16 Feb. 2017, ec.europa.eu/clima/policies/ets_en.
• Ball, Jeffrey. Why Carbon Pricing Isn't Working. 7 Dec. 2018,
www.foreignaffairs.com/articles/world/2018-06-14/why-carbon-pricing-isnt-working.
Accessed 30 Mar. 2019.
• Ecofys, and World Bank. “State and Trends of Carbon Pricing 2018.” Open Knowledge
Repository, Washington, DC: World Bank, 22 May 2018,
openknowledge.worldbank.org/handle/10986/29687.
• “Effective Carbon Rates 2018 - Pricing Carbon Emissions Through Taxes and
Emissions Trading - En.” OECD, www.oecd.org/tax/effective-carbon-rates-2018-
9789264305304-en.htm.
• “If Carbon Pricing Is So Great, Why Isn't It Working?” Ensia,
ensia.com/features/carbon-pricing-why-isnt-it-working/.
• International Monetary Fund. “Belize: Climate Change Policy Assessment.” IMF,
www.imf.org/en/Publications/CR/Issues/2018/11/16/Belize-Climate-Change-Policy-
Assessment-46372.
• Narus, Bob, et al. “Home.” Carbon Tax Center, 18 July 2018,
www.carbontax.org/blog/2018/07/18/agreed-carbon-pricing-isnt-working-now-what/.
• Tailoring Carbon Taxes to Emerging Countries' Circumstances. 20 Dec. 2017,
ideas4development.org/en/tailoring-carbon-taxes/. Accessed 30 Mar. 2019.
• Wallace, Pearl. “PMR Carbon Tax Guide: A Handbook for Policy Makers.” CLIMATE
FOCUS, 27 Mar. 2018, climatefocus.com/publications/pmr-carbon-tax-guide-
handbook-policy-makers-0.
• “What Is Carbon Pricing?” What Is Carbon Pricing? | Carbon Pricing Dashboard,
carbonpricingdashboard.worldbank.org/what-carbon-pricing.