In this episode of ICAP’s Carbon Market Conversations, we explore the critical intersection of climate action and energy development in low- and middle-income countries. Host Trevor Laroche-Theune sits down with Christophe de Gouvello and Harikumar Gadde, Senior Specialists at the World Bank, to discuss the findings of a landmark report jointly published by the World Bank, ICAP, and the International Energy Agency: Carbon Pricing in the Power Sector: Role and Design for Transitioning Toward Net-Zero Carbon Development. Together, they explore how well-designed carbon pricing instruments can drive effective transitions in the power sector, the unique considerations for low- and middle-income countries, and the technical, policy, and stakeholder strategies essential for transforming their power sectors to align with net-zero goals.


Breakdown of topics covered

0:55 - Introduction to today’s topic and our guests, Christophe de Gouvello and Harikumar Gadde

3:55 - Introduction to the recently published report, Carbon Pricing in the Power Sector: Role and design for transitioning toward net-zero carbon development and the impetus behind it

6:50 - Positive results that a well-designed carbon pricing instrument can achieve in the power sector

10:00 - How carbon pricing can align with development needs in low- and middle-income countries

13:00 - Rationale behind four selected case studies—China, Colombia, Kazakhstan, and South Africa—and the lessons that can be learned from them

16:10 - Critical questions that can guide policymakers in designing carbon pricing instruments for the power sector in low- and middle-income countries

16:40 - (1) When introduced in the power sector, would a carbon pricing instrument need to cover other sectors as well?

21:00 - (2) Who are the stakeholders along the value chain that can respond most effectively to a carbon pricing instrument?

26:00 - (3) What side effects can result from the interaction of a carbon tax or an ETS with existing sector regulations and other policy instruments? And how can these interactions be addressed to ensure consistency and effectiveness?

34:30 - Key challenges that must be properly addressed in the coming years of carbon pricing implementation in different global power sector contexts and what steps can be taken toward their resolution

42:10 - Closing remarks

 You can find the carbon pricing in the power sector report here: https://icapcarbonaction.com/en/publications/carbon-pricing-power-sector-role-and-design-transitioning-toward-net-zero-carbon