Carbon pricing is a key element of the broader climate policy architecture that can help countries reduce greenhouse (GHG) emissions cost-effectively, while mobilizing fiscal resources to foster green recovery and growth.
This paper focuses on how carbon taxes and emissions trading systems (ETS) can support a green recovery and growth, and highlights opportunities to mobilize finance by scaling up international cooperation through Article 6 of the Paris Agreement. It describes the role carbon-pricing initiatives can play in fostering green recovery and growth as well as the transition to a low-carbon economy and achieving a net-zero target in the longer term.
With such initiatives, countries can mobilize resources in a timely way and provide much-needed countercyclical support for green recovery, as well as enable economic recovery from the COVID-19 pandemic.