Carbon pricing market hits $50bn in 2015

The carbon pricing market reached US$50 billion in 2015, according to a new study by the World Bank, despite Australia scrapping its pricing mechanism last year.

Emissions trading schemes were valued at $34 billion as of 1 April 2015, up from $32 billion the previous year, despite Australia Prime Minister Tony Abbott repealing the country’s carbon pricing mechanism in July 2014.

The new study has, for the first time, valued the world’s carbon taxes which were found to be worth $14 billion, meaning emissions trading schemes are now not the only mechanism of putting a price on carbon.

The Carbon Pricing Watch assessment analyses the world's carbon markets and a more detailed report is due later in 2015.

The value of emissions trading schemes was calculated by the World Bank by multiplying the allowances issued for each scheme, multiplied by the price.

The value of carbon taxes was based on government budgets for 2015, or by the greenhouse gas (GHG) emissions covered by the carbon price on 1 April 2015.

The study found that carbon emissions are currently being priced in 39 countries and 23 other subnational regions with carbon pricing covering around 12 per cent of the world's emissions.

The volume of carbon that was covered by a pricing scheme in 2015 rose from the from almost 6 gigatonnes of carbon dioxide equivalent in 2014 up to 7 gigatonnes.

Australia’s pricing scheme covered approximately 60 per cent of the country's emissions, and charged around US$20 for every tonne of carbon dioxide emitted.

The expansion of global carbon pricing was mainly due to South Korea’s emissions trading system which became operational on 1 January 2015.

Portugal introduced a carbon tax of $5 per tonne of carbon dioxide equivalent on 1 January 2015 which is expected to generate $104 million this year.

California and Quebec extended their cap-and-trade systems this year to include transport fuels, which has increased their coverage of GHG emissions from 35 per cent to 85 per cent.

The U.N. is hosting the crucial COP21 climate conference in Paris in December and carbon pricing mechanisms are expected to form a key part of the global deal scheduled to be signed by nearly 200 states.