Carbon pricing is an accepted concept for managing carbon emissions and many jurisdictions are looking to implement one instrument or another. Many resources describing different carbon pricing mechanisms exist. However, they tend not to be comparative and are relatively high-level.

WBCSD and its members believe that carbon pricing is now regarded as one of the most efficient means of driving the transition to a low-carbon world. As an increasing number of jurisdictions have adopted or are considering adopting carbon pricing, this document focuses on the “what” and “how” rather than the “why.”

Policymakers need to choose the most suitable carbon pricing instruments and design them appropriately. This document aims to guide policymakers who are considering carbon pricing mechanisms in their choice of instruments and some key design principles.

In the process, this document hopes to stimulate further and more detailed discussions between policymakers and business leaders on how best to implement the carbon price so that it can incentivize low-carbon innovation and investment, create a global level playing field and support the attainment of the UNFCCC 2°C goal in a sustainable way.