Pricing of GHGs, including carbon, is a crucial tool in any cost-effective climate change mitigation strategy, as it provides a mechanism for linking climate action to economic development . By 2019, 57 nations around the world had implemented or scheduled implementation of carbon pricing. These initiatives cover 11 gigatons of carbon dioxide or about 20% of GHG emissions. Carbon prices in existing initiatives range between USD 1 and USD 127 per ton of carbon dioxide, while 51% of the emissions that are covered are priced more than USD 10 per ton of carbon dioxide. Moreover, in 2018, Governments raised about USD 44 billion in carbon pricing revenues . However, the carbon prices are lower than the levels required for attaining the ambitious goal of climate change mitigation, and therefore, prices would need to increase if pricing alone is going to be used to drive compliance with the Paris Agreement. Higher carbon prices would also be warranted if prices are based on the social cost of carbon, which represents the present value of the marginal damage to economic output caused by carbon emissions . This cost needs to be considered with the social benefits of reducing carbon emissions through cost-benefit analyses to make the intended regulation acceptable.
IPCC
Climate Change 2022: Impacts, Adaptation and Vulnerability
IPCC Report