Implementing effective carbon pricing

Support for carbon pricing is growing around the world. Governments, businesses and investors are recognising that nationally-appropriate taxes and trading schemes, as part of a well-aligned package of policies for low-carbon change, can reduce greenhouse gas (GHG) emissions without harming the economy. Strong, predictable and rising carbon prices send an important signal to markets, helping to align expectations on the direction of change, thereby steering consumption choices and the type of investments made in infrastructure and innovation. This working paper begins by looking at the strong momentum for carbon pricing around the world, including growing support from the private sector. It then examines the benefits of carbon pricing, and explains what is needed for successful implementation, drawing on lessons from different countries. Finally, it discusses how to advance international cooperation on carbon pricing, with particular attention to members of the G20.

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