Faced with the urgent need for more ambitious ways of addressing climate change, the use of carbon pricing as a way of implementing the Paris Agreement is increasingly coming back into the adoption. as an instrument of economic change for accelerating decarbonisation of the world economy. The choice of carbon pricing mechanism generally depends on national circumstances and a country’s greenhouse gas mitigation policy. Two measures often used are a carbon tax and emissions trading. In 2019, there were around 25 carbon taxes and 26 tradable allowance markets in operation, globally.
Article 6 of the Paris Agreement also paved the way for the use of two new market-based approaches: International Mitigation Results Transfers (ITMOs) and the Sustainable Development Mechanism.
For Tunisia, the use of carbon pricing represents a potential lever of public policy to enhance the climate ambitions of the NDC (Nationally Determined Contribution) in terms of reducing greenhouse gas emissions and strengthening energy transition measures. The carbon pricing mechanisms proposed in the Tunisian NDC are seen as key tools for encouraging investment in energy efficiency measures and renewable energy projects, particularly in those areas with the greatest potential for reducing greenhouse gas emissions.
Tunisia therefore plans to establish favourable conditions that will allow it to initiate a carbon pricing programme to support its energy transition policy and the mitigation of greenhouse gas emissions.
In this context, the World Bank’s ‘Partnership for Market Readiness’ programme is an opportunity to support Tunisia with these initiatives