Worldwide, the share of greenhouse gases covered by carbon pricing initiatives increased over the past year, indicating a growing sensitivity towards meeting emission control targets. According to the World Bank’s State and Trends of Carbon Pricing 2014 report, eight new carbon markets came up in 2013 and one in early 2014, including six in China, long held to be one of the worst emitters. Carbon pricing encompasses market-driven methods to establish emission control. For example, under emission trade schemes (ETS), permits, or carbon credits, become an item of trade—an emitter with a greater emission burden than the cap can purchase credits from an emitter who holds such permits in excess of its emission burden. Some jurisdictions may choose to impose a carbon tax to check emissions. As per the Bank’s report, the world ETS market has grown to $30 billion over 2013.
This bears well for tackling climate change and limiting any exacerbation of such changes from uncontrolled emissions. More importantly, this also is a strong sign of policy on carbon pricing getting more defined which would encourage industry to invest in green technology and low-carbon solutions. Coming ahead of the UN climate summit scheduled to be held in New York in 2015, the report’s findings should also prompt jurisdictions that have committed to emission norms under the Kyoto Protocol to step up efforts. Though India doesn’t have binding commitments under the Protocol despite being a party to it, given its emission levels, the country would do well to take a leaf from China’s book.