Designing Elements for a Robust Carbon Pricing Club

On October 14–16, 2015, experts and policymakers from academia, government, international organizations, and civil society gathered at the Airlie Center outside Washington, DC, to participate in the Stanley Center’s 56th annual Strategy for Peace Conference. This year’s conference featured autonomous roundtables where experts focused on ideas, challenges, and recommendations in four key global issue areas: Climate Change/Carbon Pricing, Human Protection from Mass Atrocity, Nuclear Security, and Global Governance.

Experts at this roundtable continued a dialogue on low carbon clubs at the intersection of pricing, technology investment, and trade. This workshop built on conversations which started at the Global Climate Policy Conference, organized by Climate Strategies and the Stanley Center in the spring 2015 in India and were continued at a workshop, hosted by the Stanley Center, Climate Strategies, ICTSD, and IDDRI on July 8, 2015, in Paris, which focused on the role, definition, and interest in developing low carbon clubs.

Carbon pricing policies have emerged as a powerful and viable tool for addressing global warming. As of September 15, 2015, 39 countries and 23 regions, representing 12 percent of the world’s population, had implemented a carbon pricing policy of some kind. Implementing carbon pricing policies involves navigating a number of dilemmas, including the selection of implicit (e.g., energy efficiency or product standards) or explicit (e.g., emissions trading schemes or carbon taxes) carbon pricing policies, depending on the response of different sectors of the economy.

Roundtable participants discussed key design elements for a carbon pricing club by examining the Carbon Pricing Pathways toolkit, the role of the World Trade Organization, and practical next steps for the formation of a multi-jurisdictional cooperative approach to carbon pricing. Conversations about converging carbon pricing policies across multiple jurisdictions will help to set principles that will enable eventual market alignment and broaden the engagement in carbon pricing discussions overall in order to support the widespread adoption of carbon pricing that can lead to global market transformation and large-scale decarbonization.

The policy dialogue brief presents the key themes of the discussion and offers the recommendations of the roundtable participants.