Carbon Pricing in Wholesale Electricity Markets

Due to increased concerns over climate change, many countries and jurisdictions around the world are implementing carbon-pricing schemes, mechanisms that apply a price to carbon and other greenhouse gas (GHG) emissions, to provide an incentive to reduce GHG emissions. According to the World Bank, as of 2022, there were 68 carbon-pricing initiatives implemented around the world. These initiatives span 46 national jurisdictions and 36 subnational jurisdictions and cover over 23% of global GHG emissions [1].