GCPC Workshop No. 2: “Effective Use of Carbon Pricing Revenues” Summary
The Global Carbon Pricing Challenge (GCPC) hosted its second online workshop on "Effective Use of Carbon Pricing Revenues" on 26 June 2024. The workshop featured insights from Ruben Vermeeren, Deputy Head of Unit at the European Commission's Directorate-General for Climate Action (DG CLIMA); Diana Cárdenas Monar, Research Fellow at the Institute for Climate Economics (I4CE); and Shannon Petry, Senior Policy Advisor in the Carbon Markets Bureau at Environment and Climate Change Canada (ECCC). Discussions focused on the usage and impact of carbon pricing revenues in the EU, international experiences with the strategic use of carbon pricing revenues, and the Canadian approach to returning revenues to households through direct rebates to support affordability.
Ruben Vermeeren highlighted the importance of transparently disclosing how carbon pricing revenues are used within the EU ETS to gain social and political acceptance. He detailed the distribution of the EU's carbon pricing revenues among various funds designed to support climate and energy initiatives, with a significant portion aiding low-income EU countries and innovative technologies. The forthcoming extension of carbon pricing in the EU to the buildings and road transport sectors through the EU ETS 2 was also discussed, with emphasis on support for vulnerable groups through the Social Climate Fund.
Diana Cárdenas Monar shared international insights from a study on maximizing the benefits of carbon pricing through strategic use of revenues, noting that use varies widely across different regions and systems. The study analysed 30 carbon pricing initiatives, revealing a diversity of approaches and highlighting that more than half of carbon pricing revenues worldwide are used for climate and nature-related purposes. Shannon Petry's presentation focused on the Canadian experience, where a majority of revenue is returned to consumers through direct rebates to support affordability.
The workshop provided a comprehensive overview of effective strategies for using carbon pricing revenues to enhance the acceptability and sustainability of ambitious climate action.