Paying the Piper: On the Legal Qualification of Carbon Prices

This chapter borrows from the economic and legal interpretation of carbon pricing approaches to identify what types of instruments could, in fact, be characterized as carbon pricing measures meaning an instrument that is capable of capturing the external costs of emitting an additional tonne of carbon by shifting the cost burden from the public to the private consumer. It looks into this topic from two different perspectives, i.e. national and international. The national perspective converses with the essence of the Paris Agreement. These would be the carbon pricing instruments a country could resort to in order to meet its nationally determined contributions (NDCs). At the international level, is the consideration for instruments that are capable not just of conferring a price on carbon but of finding price correspondence with other instruments that might have been administered by other countries. This paper ultimately brings to light the different dimensions of pricing carbon from national and international perspectives. It is expected that the classification and organization of the different instruments according to their ability to price carbon as an externality will assist policy makers not just in meeting their Paris Agreement commitments but also understanding the different instruments that are available to them when devising national mitigation strategies or undergoing environmental fiscal reforms.