In this episode of ICAP’s Carbon Market Conversations, we dive into the crucial role of carbon pricing revenues in advancing climate action, economic resilience, and social equity. Host Trevor Laroche-Theune is joined by Diana Cárdenas Monar, Research Fellow at the Institute for Climate Economics, to reflect on why carbon pricing revenue use is so important and explore how governments worldwide are strategically allocating these revenues. From California to the EU, South Korea, and beyond, they discuss best practices, emerging trends, and the challenges of ensuring carbon revenues support a just transition.

Diana also shares key insights from her recent work, Maximising benefits of carbon pricing through carbon revenue use: A review of international experiences, which outlines a four-step approach to maximizing the impact of carbon revenues. Read the full report here: https://www.i4ce.org/en/publication/maximising-benefits-carbon-pricing-through-carbon-revenue-use-review-international-experiences-climate/

Tune in for expert perspectives on revenue recycling, policy design, and the future of carbon pricing as a key tool for climate finance.


Breakdown of topics covered:

0:55 - Introduction to today’s topic and our guest, Diana Cárdenas Monar

2:45 - Introduction to how carbon pricing instruments accrue revenue and why revenue recycling is an important concept and practice

5:00 - How revenues can affect environmental and economic objectives

6:35 - How revenues can contribute to a just transition and the social acceptability of carbon pricing

10:30 - The most common ways that jurisdictions allocate carbon pricing revenues and differences by country profile

15:00 - Further jurisdiction-specific examples that stand out

19:10 - A four-step approach to making the most of carbon pricing revenues

25:10 - Notable lessons from jurisdictions that have successfully implemented strategic revenue use

27:30 - Potential pitfalls or unintended consequences of revenue use and compensation measures and how policymakers can avoid such issues

29:50 - Future developments in carbon pricing revenue use strategies

32:45 - How global climate finance discussions influence revenue allocation

35:45 - A key challenge that must be properly addressed in the coming years of financing the transition to a low-carbon economy and what steps can be taken toward its resolution

38:05 - Closing remarks