The new EP Library Catalogue allows you to search the EP collection for:
- Journals, books and articles in paper or electronic format
- EPRS and Policy Department publications
Abstract by the author: The momentum achieved for unilateral carbon taxes in seven European countries is examined. Why is it that small countries, despite being vulnerable to forces of international competition, have been able to implement carbon taxes? A review of national experiences does not suggest that the share of fossil fuels in the energy mix defines the room for such taxes, or point to a strong role for traditional left-right ideology. Rather, it is deep-seated patterns of national policy styles with neo-corporatist traits, providing a protective device for the open economies of small countries, which condition the introduction of carbon taxes. The associated routines of decision-making offer coordination mechanisms for proactive macroeconomic policies in which carbon taxation can find a place. Parliamentary democracies with proportional representation, as is common in the smaller countries, provide access to government for political parties that pursue carbon taxation. These in turn sensitise larger political parties to climate concerns, as they benefit from institutionalised practices and routines for problem-solving and consensus-seeking.
Abstract by the author: The incrementalism of carbon pricing, which includes carbon taxes and emissions trading, has led us astray. It has been proffered as a key component of climate policy, yet evidence clearly shows that its effects are marginal. It provides limited emissions reductions and has provoked considerable political controversy in key large‐emitting countries. More importantly, pricing carbon means viewing climate change as a market failure, rather than as a problem of societal transformation. But rapid decarbonization will require more than market corrections; it demands strong state intervention to reorganize the economy. In this maximalist view, the state must create public goods, rather than merely prevent public bads. This article seeks to expand our collective political imagination about climate policy, moving beyond mundane fights about the appropriate design of carbon pricing. Instead, we need to think bigger. Aggressive climate policy begins with a reassertion of state sovereignty. Multinational corporations use ‘offshore’ tax havens to avoid paying taxes. By closing loopholes on corporate tax evasion, states reaffirm one of their fundamental functions: taxation. This reform would repatriate billions of dollars in missing capital, and help create the political conditions for meaningful action on decarbonization. Tax reform, not just carbon pricing, is climate policy too.
Abstract by the authors: Carbon pricing helps countries steer their economies towards and along a carbon-neutral growth path. This paper considers how the design of carbon pricing instruments affects their effectiveness, efficiency and feasibility. Design choices matter both for taxes and Emissions Trading Systems (ETSs). Considering the role of carbon price stability for clean investment, the paper shows how volatile carbon prices can cause risk-averse investors to forego clean investment that they would have undertaken with more stable prices. The paper then evaluates the effectiveness and efficiency of policy instruments to stabilise carbon prices in ETSs, which tend to produce more volatile carbon prices than taxes. The paper analyses the auction reserve price in California, the carbon price support in the UK, and the market stability reserve in the EU ETS. Considering feasibility, the paper discusses the tax (or emissions) base, how revenue use can affect support from households and firms, and administrative choices.
Abstract by the authors: Diversity is a gradual property for cataloging homogeneous / heterogeneous cases. Diversity is a productive, structural component to consider for policy making. Carbon pricing policy needs to take diversity into account ex-ante in its design. Mathematical optimization theorems cannot prove uniform pricing is superior. Bottom-up, specific financial incentives substitute for top-down, uniform carbon pricing.
Abstract by the authors: This study focuses on the links between food production and greenhouse gas emissions in the European Union. The analysis relies on two sets of simulations of AROPAj, a supply-side model of EU agriculture: (i) a carbon price affecting agricultural GHG emissions (from 0 to 200 EUR/tCO2eq), and (ii) a lower limit on the net quantity of food calories provided by EU agriculture (200 to 450 Mt soft wheat equivalent). The model is calibrated on six annual datasets 2007–2012. The results show that a moderate increase in the price of carbon would lead to an increase in total areas and outputs of crops. Animal production decreases over the explored range of carbon price. At 200 EUR/tCO2eq, the reduction in GHG emissions ranges from 25 to 35% depending on the year of calibration. The results also show that current net calorie production from food can be more than doubled, while simultaneously reducing GHG emissions by 10–15%. The compatibility between a reduction in GHG emissions and an increase in food calorie production relies on substantial changes in animal production and feed, which implies significant variations in grassland and fallow land. These effects are contrasted between the regions of the EU.
Abstract by the author: An interview with Michael Green, Director of Climate XChange, a non-profit focused on carbon pricing advocacy, media, and research. Topics include his involvement in climate policy and environmental advocacy, definition of carbon pricing including some types of national or subnational variants, and comparison of carbon pricing policies of United States with other countries.
Abstract by the authors: Carbon pricing is widely considered a key policy instrument for achieving substantial climate change mitigation. However, implementation remains patchy and price levels vary significantly across countries and regions. In this article, we analyze the structural social, political, and economic conditions under which carbon prices have been implemented so far. We estimate a Tobit regression model to investigate variations in explicit carbon prices over 262 national and subnational jurisdictions. Our results highlight well-governed institutions and public attitudes as the most important conditions for carbon pricing and characterize fossil fuel consumption as a barrier to the implementation of carbon prices. The results suggest that governance and public attitude need to be integrated into political economy analysis. Policy makers should take regulatory capacities and public attitudes seriously when designing carbon pricing policies.
Abstract by the authors: Momentum around carbon pricing is growing in response to urgent calls for climate action. But carbon-pricing initiatives still only cover a small share of global emissions and fall short of international mitigation goals. This Voices asks: how can carbon pricing be used to help meet the global decarbonization challenge?
Abstract by the authors: In recent years, many firms have adopted the practice of putting a price on carbon for internal decision-making as a tool to achieve their carbon strategy goals. This article asks why firms would adopt a constraint like an internal carbon price voluntarily. After discussing the economic theory behind assigning a monetary value to carbon emissions, three different models of internal carbon pricing used by firms are reviewed. A discussion on the usefulness of each internal carbon pricing model for a firm's carbon management objectives is presented. The article concludes with a discussion on limitations of internal carbon pricing and its potential to assist in the process of meeting the Paris temperature objectives.
Abstract by the author: This research investigates the relationship between climate policies, carbon pricing, and pollution tax. Building my argument by drawing on data collected from CLOSUP, The Economist, Institute of Public Opinion, IMF, IPCC, NYU Institute for Policy Integrity, Pew Research Center, Statista, World Bank etc., I performed analyses and made estimates regarding support for carbon taxes among U.S. adult respondents (%, 2009–2018), actions undertaken to reduce carbon pollution among U.S. adults (%), U.S. individuals’ preferences for how to spend carbon tax revenues (%), U.S. adults who say certain proposals would make the biggest difference/a difference (but not the biggest difference) in reducing the effects of global climate change (%), distribution of emissions of greenhouse gases by industry sector worldwide (%), time period during which U.S. individuals believe the net effects of climate change will first have a negative impact on the global economy (%), tax benefits: impact of carbon-pricing schemes (CO2 emissions reduction, 2030 estimate, %/revenue, 2030 estimate, % of GDP), and U.S. individuals who think the government should commit to reducing greenhouse gas emissions (%). The data for this research were collected via an online survey questionnaire and were inspected through structural equation modeling on a sample of 4,800 respondents.
Abstract by the authors: An anatomy identifies four main components of actual or proposed Emissions Trading Systems (ETS): (1) Pursued policy goals with the ETS instrument; (2) Public authority allocations of permits to the regulated participants; (3) Carbon emissions price levels; and (4) Participants’ abatement expenses dependent on the ready availability of affordable abatement techniques or of low-carbon innovation opportunities. These components cover a range of options. A different assemblage of options delivers different ETS exemplars. Two main exemplars are identified. The actual EU ETS is highly successful in meeting the goal of low financial burdens on EU industry, thereby precluding carbon leakage. The other exemplar opts for high carbon emissions prices in the EU to induce industrial innovations towards a low-carbon economy. Incumbent industrial interests oppose this exemplar. Contrary to current policy discourse and to wishful proposals, both ETS exemplars cannot co-exist. ETS anatomy offers insight and structure for thorough analysis and evaluation of existing ETS, resulting in context–specific and appropriate designs of the carbon trading systems.
Abstract by the authors: We study how European climate and energy policy targets affect different member states and households of different income quintiles within the member states. We find that renewable energy targets in power generation, by reducing EU ETS permit prices, may make net permit exporters worse off and net permit importers better off. This effect appears to dominate the efficiency cost of increasing the share of energy provided by renewable energy sources in the countries that adopt such targets. While an increase in prices for energy commodities, which is entailed by the policies in question, affects households in low income quintiles the most, recycling revenues from climate policy allows governments to compensate them for the losses. If renewable targets reduce the revenues from ETS permit auctions, member states with large allocations of auctionable permits will lose some of the ability to do so.
Abstract by the authors: Carbon offsets from the Kyoto Flexible Mechanisms can be used by firms in the EU Emissions Trading Scheme for compliance in lieu of EU allowances, making these carbon assets interchangeable. We offer an explanation of the price spread using a structural model of the price for Certified Emissions Reductions that combines three features: a limit for the use of Kyoto offsets within the EU ETS; a disconnect between the current price of offsets and their marginal cost of production for institutional reasons; and uncertainty about future supply and demand of offsets. Our model expresses the offset price as an average of the EU allowance price and an offset’s outside value, weighted by the probability of a binding import limit. Using a monthly series of the United Nation’s Clean Development Mechanism and Joint Implementation about offset supply and demand, we provide empirical support for our theory of offset price formation. Counterfactual simulations suggest that the price process is dominated by uncertainty.
Abstract by the authors: This paper carefully surveys the econometric literature that tests for competitiveness effects and related carbon leakage caused by the EU Emissions Trading System (EU ETS). The results of this literature tell us that to date there is no evidence of the EU ETS having had widespread negative or positive effects on the competitiveness of regulated firms, nor is there evidence of significant carbon leakage. However, the paper also identifies three important caveats to this general conclusion. Firstly, the evidence we have still largely refers to the first two trading periods, namely Phases I (2005-2007) and II (2008-2012). Secondly, some heterogeneity of estimated effects is observed, but patterns, notably sectoral patterns, hardly emerge. Thirdly, very little explored is whether the EU ETS has had long-term effects on the economy via investment leakage or firm dynamics. Further empirical studies investigating these long-term effects are particularly desirable.
Abstract by the authors: We introduce a new microsimulation model built on household transport data to study the distributional effects of carbon-based fuel taxation of private road transport in Germany. Our data includes car-specific annual mileage, fuel efficiency, and the distinction between fuel types, allowing for a very detailed analysis. The model enables focusing on different household types as well as identifying effect heterogeneity across the income distribution. We compare the recent fuel tax scheme with three policy reform scenarios to empirically test several hypotheses regarding distributional effects of carbon pricing. We find that the legal status quo of the fuel tax has overall regressive effects, with the tax on petrol being regressive and the tax on diesel being progressive. A transformation of the current tax into a revenue-neutral carbon-harmonised fuel tax yields a progressive distributional effect, while an introduction of a new carbon tax on transport fuels is neither clearly regressive nor progressive. Combining both tax schemes also has non-regressive effects. On aggregate, the distributional effects are modest. Subgroup analyses, however, reveal that the individual burden can be substantial. In sum, our results suggest that policy makers face various options for pricing road transport greenhouse gas emissions without causing an overall disproportionate tax burden on low-income households.
If you are unable to access the article you need, please contact us and we will get it for you as soon as possible.
| Data Protection Notice | Cookie Policy & Inventory |
 |
 |
 |
Journals on all devices |
Books, articles, EPRS publications & more |
Newspapers on all devices |