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What is Implicit Carbon Pricing?

Most discussion of carbon pricing relates to “explicit” carbon pricing. Explicit carbon pricing relates to putting a visible price on carbon, whether through a carbon tax, or a market mechanism that results in a market-clearing carbon price. 

Implicit carbon pricing relates to the carbon price implied by policies and measures, from renewable portfolio standards to fuel efficiency standards. Implicit carbon pricing, because it is hidden from public view, can be much higher without resulting in public blowback. Implicit carbon prices are commonly in the hundreds of dollars per ton of CO2, and have gotten as high as $1,000/ton for some policies and measures. As a result, implicit carbon pricing has played a far greater role in climate change mitigation efforts to date than explicit carbon pricing.

It’s beyond the scope of this page to comprehensively explore this and other topics, but we’ve organized substantial resources below to allow you to dig deeper into the topics on your own. 

Upon request the Climatographers can utilize these and other materials to answer specific questions you may have, or in support of internal briefings or other needs. For more information see: Topical Briefings/Courses

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