AS part of their efforts to cut greenhouse gas (GHG) emissions, countries have increased their use of carbon pricing through taxes or emissions trading systems, with coverage increasing across countries and sectors in 2021, according to a new OECD report.

Pricing Greenhouse Gas Emissions: Turning climate targets into climate actionfinds that more than 40% of GHG emissions were covered by carbon prices in 2021, up from 32% in 2018, with average carbon prices higher in 47 of the 71 countries studied. Average explicit carbon prices from carbon taxes and emissions trading more than doubled over the period to reach EUR 4 per tonne of CO2 equivalent. 

The report highlights that larger price increases occurred in countries where carbon prices were already high. This underlines differences in the extent to which countries rely on carbon pricing as a tool to combat climate change, with governments adapting their emissions reduction strategies to fit their specific circumstances. 

“Carbon pricing is one of a range of policy approaches that countries employ in their efforts to reduce emissions. This report shows how the share of emissions that is covered by carbon prices has increased in recent years,” OECD Secretary-General Mathias Cormann said. “It is clear too that a diversity of policy approaches can be used to boost mitigation efforts while ensuring energy security and affordability. The OECD’s new Inclusive Forum on Carbon Mitigation Approaches initiative will support the international community to reach net zero emissions by providing better data and information sharing about the comparative effectiveness of a full range of policy approaches beyond carbon pricing.”