Carbon Pricing Mechanism for Carbon Peaking and Carbon Neutrality

Of the various policies and campaigns to tackle climate change and reduce greenhouse gas emissions, the carbon pricing mechanism is a type of fiscal and tax policy. A message is sent through the pricing of carbon emissions: carbon emissions must be paid, thereby promoting economic entities to reduce greenhouse gas emissions, guide a low-carbon transition in production, consumption and investment, decouple economic growth from carbon emissions, achieve carbon peaking as soon as possible, and ultimately achieve carbon neutrality. As a key carbon pricing mechanism, the carbon market is widely used in the global response to climate change. As delineated by statistics compiled by the World Bank and the International Carbon Action Partnership (ICAP), as of January 2021, a total of 46 countries or jurisdictions globally have inaugurated carbon pricing frameworks. This encompasses 31 carbon market systems and 30 carbon taxation policies, enveloping carbon emissions approximating 12 billion metric tons of CO2 equivalent, which constitutes roughly 22% of the global greenhouse gas emissions. These frameworks are geographically dispersed, extending across North America, Europe, Africa, South America, and Asia. Within the People’s Republic of China, the prevailing carbon pricing architecture is a carbon market mechanism. As articulated by President Xi Jinping at the 75th United Nations General Assembly, achieving the ambitious objectives of attaining a peak in carbon emissions by the year 2030 and realizing carbon neutrality by 2060 necessitates the enactment of “more robust policies and measures.” This mandates a profound advancement of carbon pricing mechanisms to optimally leverage the efficacy of pricing strategies, thereby galvanizing societal efforts toward the ultimate goals of peaking carbon emissions and achieving carbon neutrality.