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Emissions prices and taxes in the region are well below levels estimated to significantly affect polluters

Prices and taxes on emissions in the region are well below levels estimated to have a meaningful impact on polluter behavior. Thus, the region cannot reduce emissions effectively. It is reported by Bloomberg.

Recently, more Asian governments have imposed emissions taxes to avoid global warming, but the region’s carbon markets and taxes are mostly off to slow and disappointing starts.

Carbon taxes in China and South Korea are several times lower than in the European Union, and well below levels estimated to have a significant impact on the climate. At the same time, taxes in Japan and Singapore are set at a critically low level.

This suggests that governments in these countries will not be able to change the behavior of polluters or achieve zero emissions goals, at least on their current trajectories.

Asia is struggling to implement ambitious pollution pricing instruments, especially at a time of soaring inflation, energy prices and economic instability. Carbon taxes are one of the most powerful tools for steering the economy down a path of reducing emissions.

Asia’s carbon markets are not tightly regulated, and because of that, cannot send the right signals to reduce emissions.

“Markets will only function well once tighter limits are imposed on pollution levels, raising prices and creating urgency among companies to curb emissions and demand for credit,” said Youn Sejong, the head of the Seoul-based climate protection organization Plan 1.5

Chinese carbon prices peaked at around $9 a ton early this year, while those in South Korea aren’t that much higher. At the same time, New Zealand companies pay taxes in the amount of more than $80/t, although it is the most liquid carbon market.

According to the International Monetary Fund, about 46 countries around the world currently set carbon prices through trading schemes or taxes, which cover about a third of emissions.

“The current average price of $6 a ton of carbon-dioxide equivalent needs to rise to $75 by 2030 to effectively limit global warming,” the IMF reasoned.

As GMK Center reported earlier, the consulting company Wood Mackenzie predicts that the emissions of carbon dioxide in a steel industry by 2050 will decrease by 30% compared to 2021.

China has to cut emissions in half by 2050, although this reduction will be mainly due to a drop in steel production. Last year, the country reduced steel production by 30 million tons and is committed to reducing it this year.

In 2021, the world’s steel industry emitted more than 3.3 billion tons of greenhouse gases, of which China accounted for more than 2 billion tons.