# Pillar 2Carbon Pricing Mechanisms

This pillar focuses on enhancing the interoperability and scalability of global carbon pricing mechanisms. These include core instruments such as carbon markets, carbon taxes and emissions trading systems (also known as cap-and-trade systems), as well as emerging mechanisms like Border Carbon Adjustments (BCA). Through public-private collaboration, and building on existing efforts, we work to identify actionable steps for leveraging these mechanisms to align decarbonization efforts with competitiveness considerations, and to drive discussions towards more effective multilateral frameworks across diverse markets.


## Key priorities

We analyze and engage with the carbon pricing ecosystem to:


### Identify gaps and synergies across global carbon pricing mechanisms, towards greater interoperability and harmonization.


### Conduct case studies on best practices for private stakeholder engagement in both compliance and voluntary carbon markets.


### Demonstrate how to address externalities and market failures through emerging sectoral carbon pricing mechanisms.


## Navigating the Climate-Competitiveness Nexus

Global carbon pricing mechanisms are increasingly proliferative and complex, and the emergence of Border Carbon Adjustments (BCAs) in different regions of the world has supercharged the landscape. The Carbon Finance Innovation workstream is committed to providing insights and guidance on how to leverage these compliance mechanisms for decarbonization and competitiveness, and drive the harmonization of these mechanisms towards a more effective and efficient multilateral carbon pricing landscape.


### Strengthening alignment and coherence between different carbon pricing systems.


### Developing frameworks that effectively reduce emissions in both developed and developing economies.


### Providing guidance on navigating the climate-competitiveness-compliance nexus.


## Carbon Markets in Asia

Asia's carbon markets are some of the newest and fastest developing in the world, and are critical in a region responsible for more than half of annual global emissions. The Carbon Finance Innovation workstream is committed to specific regional work in Asia to promote greater market maturity, liquidity, and interoperability, towards more rapid decarbonization.


### Enhancing collaboration among public and private stakeholders to strengthen replicability and alignment of carbon markets.


### Highlighting case studies on best practices for private stakeholder engagement in carbon markets.


## Get involved

Join us in shaping the future of climate finance.

[Get involved](https://initiatives.weforum.org/api/communities/v1/public/initiatives/site/page-redirect?initiative_id=27913250-0847-4ca9-9707-dcae2c00f594&page_id=34736699-dde9-4da6-bd3b-2647b56cf82a)


### Global Scope

Collaborating with stakeholders across the globe, with a strong focus on Asia and BASIC countries (China, Brazil, South Africa and India).


### Events

Hosting high-level roundtable sessions at various global events, enabling collaboration, gathering insights, and raising awareness.


### Knowledge Sharing

Publishing Papers and Case Studies based on information gathered from stakeholders, including from Events, Interviews and Surveys