The role of carbon pricing in the Paris Agreement
The United Nations Framework Convention on Climate Change, the Kyoto Protocol, and the Paris Agreement encourage using market-based instruments. As a market-based instrument, carbon pricing such as carbon taxes and carbon trading ensures cost-effective emissions mitigation. Article 6 of the Paris Agreement promotes global carbon pricing and provides new opportunities to involve all countries’ emissions reduction in line with their Nationally Determined Contributions. This study analyzes Article 6 of the Agreement and negotiations on rules, procedures, and modalities about new global carbon pricing for reducing emissions and creating new financial resources.