Net-zero targets adopted to date cover around 70% of global GHG emissions, but many are not yet supported by the near-term policies and regulations that are necessary to achieve them. Carbon markets, including those that are mandated by regulation and those in which demand is voluntary, can be part of the measures and mechanisms that can contribute to achieve the needed mitigation to achieve these targets. With regards to carbon pricing instruments (CPIs), such as emissions trading and carbon taxes, these are an essential part of policy frameworks and decarbonization pathways.
In the near future, jurisdictions in Latin America will continue to develop and strengthen their carbon pricing and market mechanisms to achieve their mitigation objectives and drive different socio-economic and environmental objectives. The momentum towards carbon pricing may also receive an external push, with carbon clubs and border carbon adjustment mechanisms currently under discussion in the European Union, the United States and Canada functioning as potential incentives for carbon pricing in the region.
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