Only 15 per cent of Global Greenhouse Gas emissions are currently covered by a carbon pricing scheme, according to the world bank1, yet it is a well-known tool for addressing climate change. COVID-19 is clearly the top issue for governments to deal with right now. However, after any temporary pause in emissions from the global economic slowdown, we are likely to emit more greenhouse gases than before.
The idea with carbon pricing is that charging for CO2 to compensate for the negative side effects of climate change, such as infrastructure damage from flooding, or disruption to agricultural commodities from droughts, will help steer behaviour towards activities that reduce emissions.
This report from HSBC Global Research provides a deep dive into the carbon pricing schemes around the world, and sets out how carbon pricing can work.
1 World Bank: State and Trends of Carbon Pricing, June 2019