This report provides a global view of the main regulatory and market instruments for the management of carbon emissions. Most of these have been developed by regional / national and supra-national public authorities, although the participation of the private sector is increasingly relevant.
The tools described in this document can be summarized as follows:
1. Emission Trading Systems: market mechanisms for the definition, allocation and exchange of carbon emission rights.
2. Carbon Taxes: levies imposed on carbon emitting activities to disincentivise carbon emissions.
3. Carbon Leakage Mechanisms: mechanisms to prevent the neutralization of carbon policies due to the relocation of carbon-intensive activities to less stringent jurisdictions.
4. Transport Emission Standards
4.1 Fuel Economy Standards: dictate the efficiency of vehicles, measured as the amount of carbon emissions per distance travelled or the distance travelled per volume of fuel.
4.2 Low Carbon Fuel Standards: establish the carbon-intensity per volume of fuel, as well as their content of alternative fuels.
With world regions moving towards decarbonization at different rates, the carbon instruments are very fragmented in often overlapping jurisdictions. This document aims to guide the reader through this complex landscape and help them form a general yet consistent view of the subject.
Complementing this report, the Advisian Carbon Intervention Database is an updated register of carbon instruments across the world. Both support our Advisian Carbon Risk Index Service (ACRIS), which is available via subscription.