Balancing Act: Political Economy and the Pursuit of Ambitious Carbon Pricing in Developing Countries

Carbon market is crucial for addressing climate change but unlocking the potential of carbon pricing in reducing emissions requires not only setting a clear policy direction but also overcoming political economy challenges—often a delicate balancing of local concerns, industry interests, institutional capacities, and the prevailing political landscape. In September 2024, PMI launched a report, “Balancing Act: the pursuit of Ambitious Carbon Pricing in Developing Countries” to help practitioners navigate the complex path. The report discusses strategies with case studies from several developing countries.