Carbon Pricing Buoyed by China – and US?

IEA World Energy Outlook - energy demand

by | Nov 13, 2013

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IEA World Energy Outlook - energy demandThe proportion of global emissions subject to carbon pricing is projected to grow from about 8 percent last year to about 33 percent in 2035, according to the International Energy Agency’s 2013 World Energy Outlook, Reuters reports.

The IEA predicts that China will launch nationwide carbon pricing in 2020, starting at $10 per ton and rising to $30 by 2035. In addition to the Chinese and European markets, the IEA said that in just two years’ time, it expects all power sector investment decisions in the US, Canada and Japan to include an “implicit” carbon price.

As EL PRO discussed in the EL Analysts report EPA Carbon Standards for the Power Sector – and Beyond, proposed greenhouse gas emissions caps on new power plants will effectively factor carbon pricing into the cost of US electricity. That is because for coal plants, the standards will require installation of expensive carbon capture technology.

Takeaway: The global face of carbon pricing is set to change dramatically over the next two decades.

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