Raising the level of ambition on carbon pricing in Asia and Pacific

Climate change is a fundamental threat to development; significant reductions in greenhouse gas emissions are needed to avert a climate crisis. While no single instrument will achieve this goal, there is broad agreement that carbon pricing is an integral part of climate action. This policy brief shows that carbon tax and emissions trading system are gaining momentum across the world, including in Asia and the Pacific, but current rates are too low to shift behaviour, capital and technology towards low-carbon development. While recognizing the need to raise ambition, governments are naturally concerned about the potential impacts of carbon pricing on industries, jobs and low-income households. This policy brief discusses ways to alleviate the concerns, including through effective use of carbon pricing revenues and regional cooperation.