Experiences with Carbon Pricing in Germany, EU and Japan

To halt climate change, net emissions must ultimately fall to zero. This means that any remaining emissions are balanced by removals of carbon dioxide from the atmosphere. While the goal is clear, the pathway towards net-zero is not. Various pathways have different environmental and economic tradeoffs that also diverge across regions and sectors. Carbon pricing, which harnesses the power of private actors in changing their production, consumption, and investment decisions, is an essential component of a broader strategy in coordinating mitigation efforts in a way that ensures the least cost. 

This factsheet aims to support the discussion on carbon pricing for the German-Japanese Environmental and Energy Dialogue Forum (EEDF). It reviews the experience to date with carbon pricing in Germany and Japan and spotlights emerging trends in the industrial and power generation sectors.

For this project, adelphi has outlined the rationale for global carbon pricing, how jurisdictions have pioneered such policy approaches, and described how these have recently proliferated around the world. In addition, adelphi researched and compiled a list of the main experiences with carbon pricing mechanisms in Europe, Germany, and Japan.