Cop 27: Canada debuts carbon pricing initiative

Canada launched a global initiative today aimed at increasing the jurisdictions around the world that put a price on carbon.

The UK and Chile will also participate in the Canada-led Global Carbon Pricing Challenge, announced at the UN Cop 27 climate summit in Sharm El-Sheikh, Egypt.

The initiative is aiming for 60pc of global greenhouse gas emissions to be covered by a carbon price by 2030, up from around 23pc today. Canadian prime minister Justin Trudeau set a similar 60pc goal from last year.

Participating countries will monitor progress each year and share best practices. Canada says the initiative will work toward "strengthening existing systems and supporting emerging ones" and will create a "forum for dialogue and coordination to make pricing systems more effective and compatible."

Additional participants will be announced after Cop 27 ends, Environment and Climate Change Canada told Argus.

Canada has a federal fuel charge and a separate output-based pricing system for industry, which are both enforced in provinces that do not have their own similarly stringent programs. The country's carbon price is slated to rise from C$50/metric tonne ($37.62/t) this year to C$65/t next year and to C$170/t by 2030.

Canadian provinces have often pursued less ambitious carbon pricing plans, leading to a fragmented system where regional programs vary considerably in their effectiveness, according to a government report this year.

But as it prepares for new national benchmarks to take effect next year, the federal government has cracked down on provinces for insufficiently ambitious pricing schemes. For instance, Canada recently rebuffed Nova Scotia's plan to scrap carbon pricing altogether, potentially paving the way for the federal fuel charge to take effect there.

Environment and Climate Change Canada said it will make an announcement regarding its review of provincial carbon pricing proposals in the next two weeks.

By Cole Martin