Jakarta, Intermask – As carbon pricing continues to expand across countries and sectors as part of broader carbon mitigation efforts, design choices are increasingly diverse and flexible to reflect a variety of policy objectives including reducing emissions, raising public revenue, and strengthening energy affordability, energy security, and competitiveness.
Covering 79 countries that together account for more than 82% of global greenhouse gas emissions, Effective Carbon Rates 2025 offers comparable data and insights on recent trends in energy taxation and carbon pricing. The report shows that the share of emissions subject to a carbon tax or covered by an emissions trading systems (ETS) reached almost 27% in 2023, up from 15% in 2018, with over 50 countries now operating carbon taxes or ETSs.
The report also highlights how ETSs are expanding into both traditional sectors like industry and electricity and new areas such as international shipping, while also becoming more flexible in their design. Compliance traditionally relied on permits that could be traded or purchased at auction, but other mechanisms now allow for greater adaptability. These include the use of carbon credits for sectoral or geographical flexibility, as well as temporal flexibility that enables allowances to be banked or, in some cases, borrowed, to meet compliance obligations.
Such design features are helping countries tailor their carbon pricing systems to national circumstances, and balance climate and competitiveness objectives.
Source: https://newsletter.oecd.org/c/1b2lk6Fk4W2FVQmGYHTAmD7TOG
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