Carbon Scores: how does your country stack up?
Updated: Nov 4, 2021
What is better - a high carbon price that covers a low proportion of a country's emissions, or a low price covering a high proportion of emissions?
Self evidently, a high carbon price covering a high proportion of emissions would be ideal. But there are not many (if any) countries that can claim this yet.
To rank the overall effectiveness of different carbon pricing schemes, our research team created the Monash/C2Zero Real Carbon Price Index (RCPI) Carbon Score. The score takes into account both the coverage of individual schemes and their pricing, with a target price of US$75 per tonne of CO2e applied.
The US$75 target was chosen because it is the midpoint of the US$50-100 range suggested by the High-Level Commission on Carbon Prices (2017), and it is also the target price mooted by the International Monetary Fund for the carbon price by 2030 to keep global warming under control.
A score of 1 or more would mean a country or region is covering 100 per cent of its emissions as a price of US$75 or more.
Based on current international scientific advice, an RCPI Carbon Score of 1 or more by 2030 is required for the world to have a sustainable existence. Currently, the world score is a shameful 0.059, with only 20.1% of global emissions covered by carbon prices, and prices averaging just US$22. These figures translate to the world being just below 6 per cent of the way towards meeting sustainability targets for 2030.
The chart below ranks countries and regions according to their RCPI Carbon Scores. Even countries leading the charge - Sweden at 0.74, Norway at 0.59, and Switzerland at 0.47 - have a long way to go to get to the sustainable target score of 1.
Laggard countries with no mandatory carbon pricing - including Australia, India, Russia, and Saudi Arabia - don't even make the chart. We can only hope they make a start before it is too late.