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World Bank presentation on “Globally-networked Carbon Markets”

Energy, climate change and the environment

CEPS Event

World Bank presentation on “Globally-networked Carbon Markets”


We are pleased to invite you to a presentation by the World Bank on the topic of  "Globally-networked Carbon Markets", to be followed by a Q&A .

Putting a price on carbon is a necessary step in avoiding a 4 degree world.  A long-term, predictable price signal is needed to direct investment toward low carbon growth.  While negotiations on a global climate agreement continue, countries are taking action individually and many are focusing on market-based approaches. From 2013 onward, 36 countries and 11 sub-national jurisdictions in the US and Canada, 7 cities and provinces in China, are participating or preparing to participate in Emissions Trading Schemes, and other countries are considering market options.

The benefits of a global carbon market include a widely accepted price on carbon, significant scale to attract investment, a strong signal to the market that carbon pricing is here to stay, improved price stability, and cost-efficiency.  However, expectations for a “top-down”, mandated framework for a global carbon market have diminished.  The outlook now is for a bottom-up, nationally-appropriate “pledge and review” way forward and it is widely recognized that heterogeneity across market designs and carbon assets types will be a feature going forward. 

Heterogeneity is important in terms of innovation but could lead to market fragmentation, potentially putting some of the benefits of a global carbon market beyond reach.  The challenge is to develop the next generation of carbon market services and institutions that will connect heterogeneous carbon markets and support fungibility across a variety of carbon asset types to achieve the scale and price signal needed to direct investment to low carbon opportunities. 

The idea put forward by the World Bank Group for ”Globally-networked Carbon Markets” is at an early stage and is intended to stimulate discussion on services and institutions that would be needed for the ”next generation” of carbon markets.   

The key elements of the idea are:

  • An independent rating system and independent, private sector rating agencies applying a risk-based approach to rate the environmental integrity and climate change mitigation value of carbon assets in the international market. 
  • An International Carbon Reserve to help in addressing market risks and failures.  
  • An International Settlement Platform to track cross-border trades and potentially provide a clearing house function. 

The presentation will take place on December 9th, 3.30 to 6 pm, and will be followed by an informal gathering and drinks. This event is free of charge.