Benchmarking a Global-level Carbon Price Framework: Tracking Heterogenous Carbon Pricing Towards Paris Goals

he Paris Agreement sets out that tackling climate change is a common but differentiated challenge across signatory Parties and other actors. COP26 was the most recent focal point to monitor and commit to progress. Various leaders specifically called for carbon pricing to act as a barometer and price signal during COP26 to help shift the trillions in finance towards a lower carbon economy and to meet the Paris goals. Establishing and securing agreement on a global-level benchmark carbon price can be achieved by consolidating a range of carbon pricing initiatives (explicit, implicit and implied) into a single global platform that can be broken down into regions or sectors. This can then be compared against a target price corridor required to achieve the Paris Agreement goals. A benchmark serving these dual purposes can be embedded into financial markets via an investable or tradable price, which in turn can facilitate forward pricing capabilities. In addition, a user-defined data visualization framework can support a variety of stakeholder interests.