## IMF Staff Climate Note: Introduction (clnea2021005) ## Source details **Canonical URL:** [IMF Staff Climate Note: Introduction (clnea2021005)](https://www.imf.org/-/media/files/publications/staff-climate-notes/2021/english/clnea2021005.pdf) ## Other formats - [Markdown version](/-/media/files/publications/staff-climate-notes/2021/english/clnea2021005.pdf.md) - [Structured JSON version](/-/media/files/publications/staff-climate-notes/2021/english/clnea2021005.pdf.json) --- ### Paris Agreement targets and required emissions cuts - Objective: limit future global warming to ‘well below’ 2oC and ideally to 1.5oC relative to pre-industrial levels. - Required cuts: - Cut global CO2 emissions 25–50 percent below 2021 levels by 2030, followed by a steady decline to net zero emissions near the middle of this century. - Equivalent to cutting CO2 emissions 30–55 percent relative to IMF business-as-usual (BAU) projections in 2030. - Fuel contributions to 2020 global CO2 emissions: - Coal: 39 percent - Oil: 34 percent - Natural gas: 21 percent - Note: Additional action needed on greenhouse gases beyond CO2, notably methane. ### Current warming, risks, and consequences of delay - Current warming: 1.2oC to date, already producing heatwaves, droughts, floods, hurricanes, sea level rise, and swings between extremes. - Tipping-point risks rise exponentially with warming above 1.5oC (examples: underground methane release, ice-sheet collapse, ocean circulation disruption). - Delay consequences: - Under BAU to 2030, emissions would then need to fall by an impractical 95 percent from 2030 to 2040 for a 1.5oC pathway. - Delaying mitigation increases probability of a disorderly and costly transition. ### Current pledges, ambition gap, and NDC progress - Net zero and NDC updates (as of October 2021): - 58 countries representing 61 percent of global GHGs have announced net zero targets for mid-century. - 67 of 195 countries have enhanced their 2030 targets in NDCs. - Second-round NDCs (ahead of COP26) imply a 20 percent reduction in 2030 emissions compared with BAU, up from 9 percent in first-round NDCs. - Even stronger pledges in 2030 would achieve only one to two thirds of emission reduction pathways consistent with 1.5o–2oC. - Developing-country conditional pledges add modest extra reductions globally. - Aggregate AE/EMDE-H/EMDE-L pledged CO2 reductions below BAU in 2030: - AEs: 43 percent - EMDE-H: 12 percent - EMDE-L: 6 percent ### Global ambition gap magnitude (2030) - Revised NDCs imply global emissions of 15.5 gigatons of CO2 in 2030. - Original 2015 NDCs corresponded to reductions of 21/3/4 percent (AE/EMDE-H/EMDE-L) below 2030 BAU. - Current developing country NDCs imply 2030 emissions 6 percent higher than 2021 levels (EMDE-H: 4 percent; EMDE-L: 12 percent). - Under current pledges, AE average per capita emissions would be below those of EMDE-Hs by 2030. - Historical shares of cumulative CO2 stock (1860–2021): - AEs: 51 percent - EMDE-Hs: 35 percent - EMDE-Ls: 14 percent ### Illustrative emissions-allocation scenarios to 2030 - Illustrative allocations consistent with a 2oC target (AE/EMDE-H/EMDE-L reductions below BAU): - 45/30/20 percent - 55/25/15 percent - 65/20/10 percent - Illustrative allocations in range for a 1.5oC pathway: - 70/55/35 percent - 80/50/30 percent - Under most illustrative scenarios: average per capita emissions in 2030 would be higher in EMDE-Hs than in AEs; EMDE-L per capita emissions remain below AEs and EMDE-Hs. ### Quantitative analysis: CPAT (Carbon Pricing Assessment Tool) and scope - Coverage and purpose: - Projects fossil fuel CO2 emissions and the emissions, fiscal, economic, energy price, and distributional burden of carbon pricing and other mitigation instruments for 175 countries. - Focuses on fossil fuel CO2 emissions (about three quarters of global GHGs). - Key parameterization and inputs: - Consistent with broader climate/energy modelling literature; uses IEA data, IMF and IEA energy price projections (average), fuel price elasticities typically "between about -0.5 and -0.8". - Baseline holds current fuel taxes/subsidies and carbon pricing constant in real terms. - Country grouping: - Advanced Economies (AEs) - Higher-income EMDEs (EMDE-H) - Lower-income EMDEs (EMDE-L): per capita income below $5,500. - Exclusions and caveats: - International aviation and maritime fuels excluded. - GDP projections exclude negative growth effects of global climate change. - Model abstracts from mitigation actions beyond those implicit in recent data; price-responses may not hold for dramatic price changes; omits general equilibrium effects and international fuel price feedbacks. ### Key findings: costs, effectiveness, co-benefits, and distributional outcomes - Mitigation commitments differ across groupings: pledged collective CO2 reductions below BAU in 2030 are 43/12/6 percent for AE/EMDE-H/EMDE-L. - Abatement costs (annualized costs of investing in clean vs. fossil-based energy), estimated as percent of GDP in 2030: - For a 2oC emission pathway: - AEs: 0.6–1.2 percent of GDP - EMDE-H: 0.2–0.5 percent of GDP - EMDE-L: 0.2–0.3 percent of GDP - General summary range: 0.2–1.2 percent of GDP across country groupings - For a 1.5oC pathway: - AEs: 1.4–1.8 percent of GDP - EMDE-H: 1.3–1.6 percent of GDP - EMDE-L: 0.6–0.8 percent of GDP - For EMDE-Ls, costs increase in absolute terms by $8-23 billion under the 2oC scenarios relative to costs under their current pledges. - GDP impacts and policy design: - Abatement need not significantly impede longer-term GDP if policy design is appropriate. - Revenue-neutral shifts from taxing labor to carbon could, after transitory losses, moderately increase GDP in some models; recent empirical studies suggest carbon pricing reforms have not reduced GDP. - Public investments in renewables have larger fiscal multipliers than in non-renewables and can support GDP. - Carbon pricing and revenue potential: - Global carbon pricing average currently: $3 per ton. - Revenues (2030 averages) from carbon pricing scenarios: - AEs: roughly 1 percent of GDP for carbon prices of $75. - EMDE-Hs: 1.5 percent of GDP for carbon prices of $50. - EMDE-Ls: 1 percent of GDP for carbon prices of $25. - Two thirds of global emissions are effectively unpriced; 15 percent have a negative price due to explicit fuel subsidies. - Domestic co-benefits: - Reductions in local air pollution mortality can more than offset abatement costs (before counting climate benefits), especially in countries with severe air pollution (e.g., China, India, Turkey). - Distributional impacts and revenue recycling: - First-round household impacts vary: slightly regressive, progressive, or distributionally neutral depending on context. - Example household burdens (2030, average percent change in consumption): - Turkey and the US: around 2 percent - China: around 5 percent - Revenue recycling can offset about 90 percent of average household burden in illustrated cases; illustrative progressive recycling can make lower-income households better off by around 3 to 8 percent of consumption while higher-income households face net burdens up to around 0.5–1.5 percent. - Country-specific illustrative recycling shares: - United States ($75): 50 percent labor tax reductions; 50 percent general labor tax reduction. - China ($50): 85 percent labor tax reductions; 15 percent targeted transfer to poorest 25 percent. - Turkey ($50): 85 percent labor tax transfers; 15 percent targeted transfer to poorest 25 percent. - Argentina ($50): 75 percent labor tax reductions; 25 percent targeted transfers to bottom 30 percent. ### Implied carbon prices by scenario (2030) - Under current ambition, implied 2030 carbon prices: - AEs: $140 per ton - EMDE-H: $30 per ton - EMDE-L: $20 per ton - For 2oC allocations, implied price ranges: - AEs: $150–205 per ton - EMDE-H: $40–70 per ton - EMDE-L: $20–60 per ton - Note: Dispersion in implied carbon prices across country groups is large and may hinder rapid mitigation scale-up; prices assume group-wide adoption of equivalent instruments. ### International coordination, finance, and equity considerations - Needed support and finance: - Stronger international commitments needed to scale up ambition in developing countries. - Developed countries committed to mobilize $100 billion a year from 2020 onwards; recent stock-take: $79.6 billion in 2019. - Composition: 43 percent from multilateral development banks, 36 percent from bilateral donations, 18 percent from privately leveraged sources. - Allocation: about 75 percent mitigation, 25 percent adaptation. - Private financing barriers: higher perceived risks in EMDEs require standardized risk measures and information for investors. - Policy coordination options: coordinated carbon pricing (e.g., “Climate Club”), international carbon price floor; agreements should consider differentiated responsibilities and financial/technological transfers. ### Country-level heterogeneity, BAU drivers, and implications - BAU emissions projection drivers: (i) GDP growth; (ii) energy intensity of GDP; (iii) emissions intensity of energy. - BAU GDP growth (2021–2030): - China, India, Indonesia: rapid growth of 60–80 percent. - Most other G20 countries: 8–25 percent. - Energy intensity under BAU: projected decrease of 10–25 percent across countries. - Emissions intensity of energy under BAU: modest changes (policies frozen in BAU). - Net BAU effect for G20: projected 15 percent expansion in CO2 emissions between 2021 and 2030. - G20 mitigation heterogeneity: - Among G20 AEs, all but Australia pledged GHG reductions of 30 percent or more below BAU; AE average reductions: 43 percent vs. BAU. - Six G20 EMDEs pledged reductions of 15 to 30 percent; three EMDE pledges (Russia, Turkey, India) remain higher than BAU. - EMDE-H average cuts: 5 percent below BAU; EMDE-L targets average above BAU. - Within-group variation underscores need to consider country-specific circumstances when allocating global mitigation efforts. ### Least-cost mitigation instruments and policy mix (Box 2 highlights) - Carbon pricing (tax or ETS) is least-cost in principle by equating marginal rewards for emissions reduction across responses; political constraints often necessitate sectoral instruments. - Key elements of a comprehensive mitigation strategy: - Balance carbon pricing with sectoral instruments (feebates, regulations) to improve acceptability. - Revenue recycling to boost the economy (lower labor taxes, fund productive investments) and equitably distribute benefits. - Public investments in clean infrastructure (e.g., EV charging, grid updates). Example quantitative need: an additional 0.2 percent of GDP in public investment in energy per year to 2030 (about one fifth of revenues from a $75 global carbon tax). - Basic research for technologies (energy storage, direct air capture, CCS) and measures to remove deployment barriers. - Market reforms to enhance competition and investment in energy sectors. - Just transition measures: social safety nets, assistance for displaced workers and regions. - Measures to limit impacts on industrial competitiveness and pricing or schemes for non-energy GHGs. - Design and implementation considerations: - Extensive stakeholder consultations and phased reforms to build political support. - Recent transitory fossil fuel price increases underscore the value of low-carbon transitions to shield economies from fuel price shocks. ### Effectiveness of alternative instruments and relative impacts (selected quantitative points) - Emissions responsiveness examples: - A $75 carbon price reduces emissions around 25 percent in three AEs but only around 15 percent in three other AEs. - For EMDE-Hs, a $50 carbon price reduces emissions around 25–30 percent in three cases and about 15 percent in three others. - For the whole G20, measures equivalent to a carbon price rising to over $75 per ton by 2030 (on top of existing measures) are needed to cut emissions at least 30 percent below BAU. - Revenues and energy price impacts (2030, illustrative carbon prices $75/$50/$25 for AE/EMDE-H/EMDE-L): - Coal prices increase most in absolute terms; natural gas and electricity intermediate; road fuel increases more moderate given existing taxes. - Absolute price increases similar across countries for coal, natural gas, gasoline; percent increases higher in lower-income countries due to lower BAU price levels. - Relative effectiveness (modeled with $50 carbon-price-equivalent across policies): - Emissions pricing confined to power and industry (typical ETS coverage): around 60–80 percent of reductions from comprehensive carbon pricing. - Regulations/feebates for power, vehicles, and product efficiency: around 70 percent of reductions from carbon pricing. - Raising road fuel taxes: effectiveness around 10 percent of comprehensive pricing. - Taxing electricity consumption: effectiveness around 20 percent of comprehensive pricing. - Coal taxes: relatively effective in coal-intensive countries, less so elsewhere. ### Conclusion: policy implications and urgency - Near-term ambition gap: Updated 2030 commitments would achieve only one to two thirds of reductions consistent with 1.5o–2oC pathways. - Policy gap: Many countries have not identified or implemented the needed mitigation policies. - Needed global measure: Measures equivalent to a carbon price of at least $75 per ton by 2030—on top of existing energy taxes and other measures—are needed to be on track with containing warming below 2oC. - Costs and co-benefits: Costs should be manageable and often offset by domestic environmental co-benefits from reduced fossil fuel use. - Equity and finance: Differential emissions reductions and enhanced climate finance are needed for equitable scaling; developed countries are lagging on climate finance commitments. - Framing and practicality: Raising fossil-fuel prices is most effective but political challenges require combining carbon pricing with other instruments, revenue recycling, just-transition measures, and complementary public investments. - Risk of delay: Failure to narrow ambition and policy gaps risks a cliff-edge in 2030–2040 that would raise transition costs and jeopardize temperature goals; an orderly, cooperative transition is strongly preferable. *Source: IMF Staff Climate Note (clnea2021005)* ### Introduction ### Introduction ### Paris Agreement targets and required emissions cuts - The Paris Agreement seeks to limit future global warming to ‘well below’ 2oC and ideally to 1.5oC relative to pre-industrial levels. - Limiting warming to this range requires cutting global CO2 emissions 25–50 percent below 2021 levels by 2030, followed by a steady decline to net zero emissions near the middle of this century (Figure 1). - These reductions are equivalent to cutting CO2 emissions 30–55 percent relative to IMF business-as-usual (BAU) projections in 2030. - Substantial cuts in coal, oil, and natural gas consumption are needed—in 2020 these fuels accounted for 39, 34, and 21 percent of global CO2 emissions respectively. - Additional action on greenhouse gases (GHGs) beyond CO2 will also be needed, notably on methane. ### Current warming, risks, and consequences of delay - Current global warming to date of 1.2oC is already producing a wide range of impacts, including heatwaves, droughts, floods, hurricanes, sea level rise, and swings between climate extremes. - The frequency and severity of these impacts is projected to rise as the planet continues to warm. - The risks of ‘tipping points’ (e.g., runaway warming from release of underground methane, collapse of major ice sheets, shutting down of ocean circulatory systems) rise exponentially with warming above 1.5oC. - Delaying mitigation increases the probability of a disorderly and costly transition; under BAU to 2030, emissions would then need to fall by an impractical 95 percent from 2030 to 2040 for a 1.5oC pathway. ### Current pledges, ambition gap, and NDC progress - 58 countries representing 61 percent of global GHGs have announced net zero targets for mid-century, and 67 of 195 countries have enhanced their 2030 targets in Nationally Determined Contributions (NDCs) (as of October 2021). - Second-round targets submitted ahead of COP26 in November 2021 imply a 20 percent reduction in 2030 emissions compared with BAU, up from a 9 percent reduction in first-round NDCs submitted for the 2015 Paris Agreement. - Even if stronger pledges were achieved in 2030, they would achieve only one to two thirds of emission reduction pathways consistent with 1.5o–2oC. - Some developing countries have pledged stronger ambition conditional on climate finance; globally the extra reductions from conditional pledges are modest. ### Carbon pricing, energy taxes, and the policy gap - New measures equivalent to a global carbon price exceeding $75 per ton would be needed by 2030, in addition to existing energy taxes, to keep warming below 2oC. - In 2021, 30 national carbon pricing schemes were operating; new initiatives in China and Germany were launched; prices in the EU Emissions Trading System (ETS) rose above $70. - The average price from explicit carbon pricing across [countries] is only $3 per ton of CO2. Energy taxes add another $9 to the global average price, mostly through road fuel taxes. - Two thirds of global emissions (largely coal and natural gas) are effectively unpriced, and 15 percent have a negative price due to explicit fuel subsidies (Figure 2). ### International and national policy implications - Mitigation ambition needs to be scaled up globally while accommodating differentiated capabilities and responsibilities among countries; supportive international policy will be key. - More countries will need long-term net zero commitments and aligned intermediate 2030 targets. - Differentiated responsibilities can be accommodated through proportionately lower ambition for developing countries, possibly reflecting longer transition periods to net zero. - Climate finance flows from developed to developing countries and international coordination mechanisms will be needed to address obstacles hindering unilateral mitigation efforts. - At the national level, the policy gap can be met by scaling up carbon pricing and/or other mitigation instruments; comprehensive domestic strategies are key. - Comprehensive strategies can improve acceptability via targeted assistance for vulnerable groups and equitable distribution of costs and revenue recycling benefits. - Complementary public investments in enabling infrastructure, especially in the energy sector, and reinforcing sectoral policies may also be needed. ### Quantitative analysis: CPAT and scope of the Note - The Note uses the Carbon Pricing Assessment Tool (CPAT), a streamlined spreadsheet-based model which projects, on a country-by-country basis for 175 countries, fossil fuel CO2 emissions and the emissions, fiscal, economic, energy price, and distributional burden of carbon pricing and other commonly used mitigation instruments. - CPAT is parameterized so emissions projections and responsiveness of fuel use to pricing are consistent with the broader climate/energy modelling literature (see annex for description and caveats). - Countries are grouped into three: Advanced Economies (AEs), higher-income (EMDE-H) and lower-income Emerging Market and Developing Economies (EMDE-L), with per capita income above or below $5,500. - The Note focuses on fossil fuel CO2 emissions, which are about three quarters of global GHGs. - Results for individual G20 countries are discussed; the 19 individual G20 countries account for 80 percent of global BAU CO2 emissions in 2030. ### Key findings of the analysis - There are large differences in mitigation commitments across country groupings. AE/EMDE-H/EMDE-L countries have pledged to reduce their collective CO2 emissions by 43/12/6 percent below BAU levels in 2030. - Several options exist for enhancing ambition across countries in line with temperature targets; illustrative examples show different distributions of mitigation effort across the country groups, consistent with keeping temperatures below either 2oC or 1.5oC. Reaching 1.5oC will require much stronger mitigation action by all country groups. - Emissions abatement costs associated with enhanced ambition allocations are generally manageable: abatement costs (primarily the annualized costs of investing in clean rather than fossil-based energy) are equivalent to around 0.2–1.2 percent of GDP across country groupings for a 2oC emission pathway, though they range at 1.3–1.8 percent of GDP for AE and EMDE-Hs in a 1.5oC pathway. - GDP need not be significantly impeded in the longer term, though design of mitigation policies is critical. Models differ on GDP impacts of carbon pricing; some indicate that a revenue-neutral shift from taxing labor to carbon could, after transitory losses, moderately increase GDP due to smaller negative fiscal multipliers for carbon pricing. Recent empirical studies suggest carbon pricing reforms have not reduced GDP. Boosting green investment could also support GDP. - Differences in mitigation ambition, and in the costs of cutting emissions, can imply large discrepancies in carbon prices or the stringency of other mitigation instruments, which may hamper aggressive mitigation scaling. - Within development-level groupings, there is considerable variation in countries’ mitigation pledges and in the responsiveness of emissions to pricing, underscoring the need to consider individual country circumstances, subject to the overall cap on global emissions implied by temperature goals. - Carbon pricing can mobilize substantial revenues useful for supporting equity and other objectives; recycling revenues can support both equity and poverty objectives. - Climate mitigation can generate substantial domestic environmental co-benefits, notably reductions in local air pollution mortality; these co-benefits can more than offset abatement costs—before counting climate benefits—especially in countries with severe air pollution exposure. - Beyond carbon pricing, policy effectiveness varies. Carbon pricing schemes for electricity and industry, cross-sectoral packages of feebates and/or emission rate regulations, and in a few cases coal taxes can have reasonable effectiveness relative to comprehensive carbon pricing. Taxes on road fuels or electricity consumption have relatively low effectiveness. ### Closing the global mitigation ambition gap (overview) - Emissions are highly concentrated in a handful of major economies, with both emissions and ambition levels varying strongly across countries. - AEs generally have aggressive emissions reduction pledges. Large EMDE-Hs and EMDE-Ls have smaller—or in some cases nonbinding—pledges in current NDCs. - Some fast-growing EMDE-H countries are on track to match or exceed per capita emissions of some AEs by 2030, while most EMDE-Ls will still have much lower per capita emissions. - Historically, EMDE annual emissions have grown from 36 percent (5 billion tons CO2) in 1970 to 69 percent (24 billion tons) in 2020. AE emissions have stabilized at around 10–12 billion tons since 1970. - AEs, EMDE-Hs, and EMDE-Ls account for 51, 35, and 14 percent, respectively, of the cumulative stock of CO2 in the atmosphere from 1860–2021 emissions. - Per capita emissions remain higher in AEs but have been falling since 2000, while rising rapidly in EMDE-Hs and more gradually in EMDE-Ls. - Under current pledges, AE average per capita emissions would be below those of EMDE-Hs by 2030. - Ambition gaps have narrowed since 2015 but remain large. Comparing ambition relative to future BAU levels better reflects mitigation efforts because it allows for rising total emissions in lower-income EMDEs over the next decade, though at a slower rate. - In total, there is a global ambition gap in NDCs of 3.6 to *IMF Staff Climate Note: Introduction (clnea2021005)* ### 15.5 gigatons of CO ### 15.5 gigatons of CO2 in 2030 ### Global mitigation ambition gaps and illustrative scenarios to 2030 - Current revised NDCs (as of October 2021) imply global emissions of 15.5 gigatons of CO2 in 2030, requiring a tripling of ambition in the latter case. - Aggregate AE/EMDE-H/EMDE-L ambition in revised NDCs corresponds to reductions in CO2 emissions of 43/12/6 percent below BAU levels in 2030. - Original 2015 NDCs corresponded to reductions of 21/3/4 percent below 2030 BAU levels. - Current developing country NDCs imply emissions in 2030 would be 6 percent higher than 2021 levels (4 and 12 percent in EMDE-H and EMDE-Ls, respectively). - Illustrative AE/EMDE-H/EMDE-L emissions reduction allocations that would put emissions within range for a 2oC target: - 45/30/20 percent below BAU - 55/25/15 percent below BAU - 65/20/10 percent below BAU - Illustrative allocations that would be in range for a 1.5oC pathway: - 70/55/35 percent below BAU - 80/50/30 percent below BAU - Under most illustrative scenarios, average per capita emissions in 2030 would be higher in EMDE-Hs than in AEs; EMDE-L per capita emissions would remain below AEs and EMDE-Hs in all scenarios. - All country groups need to enhance ambition from 2015 NDCs to be on track with the Paris Agreement temperature goals. ### Abatement costs and GDP impacts - Abatement costs measure the costs to households and firms from reducing energy use and shifting to cleaner energy sources; estimates assume emissions are reduced in the least-cost way. - Abatement costs are estimated to be manageable (equivalent to 0.2–1.2 percent of GDP) for a 2oC target but are more considerable for a 1.5oC target. - Under illustrative allocations for 2oC, abatement costs (equivalent to percent of GDP in 2030) are: - AEs: 0.6–1.2 percent of GDP - EMDE-H: 0.2–0.5 percent of GDP - EMDE-L: 0.2–0.3 percent of GDP - Under illustrative allocations for 1.5oC, abatement costs (percent of GDP) are: - AEs: 1.4–1.8 percent of GDP - EMDE-H: 1.3–1.6 percent of GDP - EMDE-L: 0.6–0.8 percent of GDP - For EMDE-Ls, costs increase in absolute terms by $8-23 billion under the 2oC scenarios relative to costs under their current mitigation pledges. - Empirical findings and simulation studies cited indicate that previous carbon pricing reforms have not reduced GDP and that revenue-neutral tax shifts from labor onto carbon can, after transitory losses, moderately increase GDP. - Investments in renewable energy have larger fiscal multipliers than investments in non-renewables; public investments in renewables could support GDP objectives. ### Implied carbon prices by scenario (2030) - Under current ambition, 2030 implied carbon prices are: - AEs: $140 per ton - EMDE-H: $30 per ton - EMDE-L: $20 per ton - For 2oC allocations, implied price ranges are: - AEs: $150–205 per ton - EMDE-H: $40–70 per ton - EMDE-L: $20–60 per ton - There is considerable dispersion in carbon prices implied by ambition allocations; wide differences may hinder rapid scale-up of mitigation. - Implied carbon prices assume that all countries within a grouping adopt the price (or equivalent instruments) that achieve the aggregate emissions reduction for that group. ### International coordination, finance, and equity considerations - Stronger commitments from the international community to support scaling up of ambition in developing countries will be needed to close a sizable portion of the ambition gap. - AEs can play an important role in closing the ambition gap, building on their stronger emissions commitments. - International agreement on policy coordination regimes will likely be needed to overcome obstacles to unilateral mitigation action. - External financing is critical given limited financing options in EMDEs for green projects, especially post COVID-19. - Developed countries committed to mobilizing $100 billion a year from 2020 onwards for mitigation and adaptation in developing countries but the most recent stock-take put these flows at $79.6 billion in 2019. - 43 percent of these flows from multilateral development banks, 36 percent from bilateral donations, and 18 percent from privately leveraged sources. - About 75 percent of the flows are for mitigation and 25 percent adaptation. - Scaling up private financing for EMDEs requires overcoming higher perceived risks, e.g., through standardized measures of risk to provide better information for private investors. - Policy coordination proposals include coordinated carbon pricing mechanisms such as a “Climate Club” or an international carbon price floor; agreements should consider differentiated responsibilities and may differentiate price or quantity targets based on development levels and financial/technological transfers. ### Country-level mitigation ambition, BAU drivers, and heterogeneity - BAU emissions projections depend on three trends: (i) GDP; (ii) energy intensity of GDP; (iii) emissions intensity of energy. - Under BAU, GDP projected growth between 2021 and 2030: - Rapid growth of 60–80 percent in China, India, and Indonesia. - More moderate growth of 8–25 percent in most other G20 countries. - Energy intensity of GDP is projected to decrease by 10–25 percent across countries under BAU. - Changes in emissions intensity of energy are modest under BAU because policies to advance renewables are frozen in the BAU scenario. - On net, BAU emissions from G20 countries are projected to expand 15 percent between 2021 and 2030. - Mitigation commitments among G20 countries show notable heterogeneity: - Among G20 AEs, all but Australia pledged GHG reductions of 30 percent or more below BAU; average AE reductions are 43 percent vs. BAU. - Six G20 EMDEs pledged reductions of 15 to 30 percent; three EMDE pledges (Russia, Turkey, and India) remain higher than BAU. - EMDE-H average cuts are 5 percent below BAU while EMDE-L targets average above BAU. - Across UNFCCC Parties, 67 of 198 Parties have increased their 2030 mitigation ambition; Annex I commitments improved from 10 to 29 percent below BAU, whereas Non-Annex I commitments are roughly around BAU. ### Least-cost mitigation instruments and policy mix - Carbon pricing (carbon tax or ETS) potentially achieves mitigation goals at lowest economic cost by equating the reward for reducing emissions across responses. - Political and acceptability constraints may limit or preclude pricing; therefore reinforcing sectoral instruments (feebates, regulations) are needed in a comprehensive mitigation strategy. - Even when countries use non-pricing approaches, analysis of carbon pricing is useful as it indicates least-cost behavioral responses that other instruments should aim to mimic where possible. *Source: IMF staff Climate Note (excerpts provided in content unit)* ### Box 2. Key Elements of a Comprehensive Mitigation Strategy ### Box 2. Key Elements of a Comprehensive Mitigation Strategy ### Key elements of a comprehensive mitigation strategy - Balance between carbon pricing and other mitigation instruments—especially feebates or regulations—at the sectoral level that are less efficient than pricing but likely have greater acceptability. - Recycling of carbon pricing revenues in ways that boost the economy (e.g., through lowering taxes on work effort or funding socially productive investments), making sure that benefits are equitably distributed across households. - Public investments in clean technology infrastructure networks (e.g., electric vehicle charging infrastructure, grid updates to accommodate renewables) that would not be provided privately—estimates vary, but an additional 0.2 percent of GDP in public investment in energy could be needed per year to 2030, which is about one fifth of the revenues raised by a $75 global carbon tax. - Basic research to advance critical technologies that are currently far from the market (e.g., energy storage, direct air capture and carbon capture and storage) and measures to address barriers to large-scale deployment of clean technologies. - Market reforms to enhance competition and investment in the main energy sectors. - Just transition measures to assist vulnerable groups, such as stronger social safety nets or tax reliefs for low-income households, assistance programs for displaced workers and at-risk regions. - Measures to limit impacts of carbon pricing on industrial competitiveness. - Pricing or similar schemes for GHG emissions beyond the energy sector. ### Design and implementation considerations - Extensive upfront consultations with stakeholders and information campaigns can help build political support. - Reforms should be phased in progressively to give households and firms time to adjust. - Recent increases in fossil fuel prices, while likely transitory, underscore the need for low-carbon transitions to shield the economy from recurrent fuel price shocks and the importance of a comprehensive and inclusive approach to reform. ### Emissions responsiveness and ambition needs - A $75 carbon price reduces emissions around 25 percent in three AEs but only around 15 percent in three other AEs. - For EMDE-Hs a $50 carbon price reduces emissions around 25–30 percent in three cases and only about 15 percent in three others. - For the whole G20, measures equivalent to a carbon price rising to over $75 per ton by 2030, on top of existing measures, are needed to cut emissions at least 30 percent below BAU levels, consistent with limiting warming to Paris temperature ranges. - So far, global carbon pricing averages just $3 per ton. ### Carbon pricing: revenue and price impacts - Revenues from carbon pricing (2030, averages): - AEs: roughly 1 percent of GDP for carbon prices of $75. - EMDE-Hs: 1.5 percent of GDP for carbon prices of $50. - EMDE-Ls: 1 percent of GDP for carbon prices of $25. - For a given carbon price, potential revenues are higher for countries with higher CO2 emissions intensity of GDP under BAU. - Revenues increase less than proportionally to the carbon price due to progressive erosion of the tax base. - Energy price impacts (2030, from $75/$50/$25 carbon prices for AE/EMDE-H/EMDE-Ls): - Coal prices increase the most (owing to high emissions intensity per unit of heat produced). - Natural gas and electricity see intermediate impacts. - Road fuel (gasoline) prices see more moderate impacts (starts from a much higher base due to existing road fuel taxes). - Absolute price increases from a given carbon price are similar across countries for coal, natural gas, and gasoline; percent increases vary with BAU price levels and tend to be higher in lower-income countries. - Absolute electricity price increases vary according to the mix of generation fuels. ### Emissions abatement costs, domestic co-benefits, and net benefits - Under carbon prices of $75/50/25 for AE/EMDE-H/EMDE-Ls in 2030: - Emissions abatement costs vary from 0.1 to 0.9 percent of GDP depending on price, BAU emissions intensity of GDP, and proportionate reduction in emissions induced by pricing. - Domestic environmental co-benefits—most importantly reductions in mortality from local air pollution—offset much of these costs. - Net benefits (abatement costs minus domestic environmental co-benefits) are approximately zero or moderately positive in most cases, and strongly positive in some cases (e.g., China, India, Turkey). ### Distributional impacts and revenue recycling - First-round household impacts from carbon pricing can be slightly regressive, progressive, or distributionally-neutral depending on country context. - Examples (2030, household burdens as percent change in household consumption relative to pre-policy, average burdens): - Turkey and the US: around 2 percent of household consumption. - China: around 5 percent of household consumption. - Burden composition: - Higher electricity prices impose disproportionately large burdens on low-income households but represent a minor share of total burden. - Indirect burdens from increases in general consumer goods prices are the largest component and broadly distribution-neutral. - Revenue recycling can substantially offset burdens: - Recycling could offset about 90 percent of the average household burden across the four illustrated countries, though this fraction will decline with higher carbon prices and deeper decarbonization as the base progressively erodes. - Illustrative recycling scenarios producing a progressive outcome: - Revenues used to strengthen social safety nets for low-income households and the rest used for labor tax reductions can make lower-income households better off on net (by around 3 to 8 percent of consumption), median households roughly neutral, and higher-income households face net burdens up to around 0.5–1.5 percent of consumption. - Country-specific recycling shares used in illustrations: - United States ($75 carbon price): 50 percent through labor tax reductions (higher personal income tax thresholds) and 50 percent for a general labor tax reduction. - China ($50 carbon price): 85 percent for proportionate reduction in labor taxes and 15 percent for a targeted transfer for the poorest 25 percent of households. - Turkey ($50 carbon price): 85 percent for labor tax transfers and 15 percent for a targeted transfer for the poorest 25 percent of households. - Argentina ($50 carbon price): 75 percent for labor tax reductions and 25 percent for targeted transfers to bottom 30 percent of households. ### Alternative mitigation instruments and effectiveness - Policymakers can use taxes on individual fuels or on emissions from specific sectors, emission rate regulations, or feebates as substitutes or complements to carbon pricing. - Regulations and feebates: - May be politically more acceptable as they avoid significant increases in energy prices. - Are less efficient than carbon pricing on average because they do not promote demand responses (e.g., reduce driving). - Ideally should promote the full range of behavioral responses within a sector (example: power sector policies should reward shifting from coal to gas to fossil generation with carbon capture and then to renewables). - Relative effectiveness (modeled with a $50 carbon price equivalent across policies): - Emissions pricing confined to power and industry (typical ETS coverage) promotes around 60–80 percent of the emissions reductions that comprehensive carbon pricing would achieve (which includes transport and buildings). - A combination of regulations or feebates promoting lower emissions intensity in power, vehicles, and efficiency of other energy-using products promotes around 70 percent of the emissions reductions from carbon pricing. - Raising road fuel taxes or taxing electricity consumption has effectiveness around 10 and 20 percent, respectively, of comprehensive pricing. - Coal taxes are relatively effective in coal-intensive countries (e.g., China, India) but less so elsewhere. ### Conclusion and policy implications - Near-term ambition gap: Recent updates to countries’ emissions commitments for 2030 would achieve only one to two thirds of reductions consistent with 1.5o–2oC pathways. - Policy gap: Many countries have not identified or implemented needed mitigation policies. - Needed global measure: Measures equivalent to a carbon price of at least $75 per ton by 2030—on top of existing energy taxes and other measures—are needed to be on track with containing global warming below 2oC. - Costs and co-benefits: The costs of achieving needed global emissions reductions should be manageable and in many cases are offset by domestic environmental co-benefits from reducing fossil fuel use. - International equity and finance: An equitable scaling up of near-term global mitigation ambition can be achieved through differential emissions reductions for developed and developing countries and enhanced climate finance commitments for lower income countries; developed countries are currently lagging on their climate finance commitments. - Transition framing: The most effective way to reduce fossil fuel use is to raise their price, but political challenges require balancing carbon pricing with other instruments and comprehensive approaches that address equity, vulnerable groups, and provide complementary public investment in clean technology infrastructure. - Risk of delay: Without urgent narrowing of ambition and policy gaps, a potentially dangerous cliff-edge for emissions reductions for 2030–2040 could greatly increase transition costs and put temperature goals beyond reach; an orderly, internationally cooperative, and timely transition is strongly preferable to a disorderly, uncooperative, and late transition. *IMF | Staff Climate Notes — Box 2. Key Elements of a Comprehensive Mitigation Strategy* ### References ### clnea2021005 - References ### Broader sources of GHGs: key quantitative points - CO2 is identified as the largest among the long-lived climate pollutants; most mitigation analysis focuses on CO2. - Methane (CH4) has a warming impact "28 times over a 100-year time horizon" relative to CO2. - IPCC (2018) indicates methane will need to be cut "by 40-45 percent by 2030 relative to 2020 levels" to be on track to 1.5C. - Cutting methane emissions "45 percent by 2030 could help avoid almost 0.3 degrees of warming in the 2040s." - In 2020, on a lifetime warming equivalent basis: - fossil fuel CO2 emissions accounted for "72 percent of global GHGs"; - methane from agriculture, extractive activities, and waste accounted for "16 percent"; - nitrogen oxide (N2O) from agriculture accounted for "5 percent"; - CO2 and fluorinated gases from industrial processes accounted for "7 percent". - Pricing or proxy-pricing schemes are discussed as instruments to address non-CO2 sources: - methane from extractive industries could be priced based on production levels and default leakage rates (with rebates for lower emission rates); - process emissions have been priced in ETSs covering industry or might be priced by production with default emission rates; - forest carbon sequestration might be promoted via feebate systems rewarding/penalizing landowners relative to a baseline year; - agricultural emissions are challenging to monitor, but proxy pricing based on farm outputs or inputs and default emission rates might be feasible. ### The Carbon Pricing Assessment Tool (CPAT): scope, inputs, and mechanics - Coverage and purpose: - CPAT provides projections "on a country-by-country basis for 175 countries" of fuel use and CO2 emissions by major energy sector. - It starts with fossil and other fuel use by the power, industrial, transport, and residential sectors. - Baseline projection inputs: - GDP projections (from latest IMF forecasts); - assumptions about income elasticity of demand and own-price elasticity of demand for electricity and other fuel products; - assumptions about the rate of technological change affecting energy efficiency and productivity of energy sources; - future international energy prices. - Data and parameter sources: - Basic model parameterized using IEA data on recent fuel use by country and sector. - International energy prices projected using an average of IEA (rising) and IMF (flat) projections for coal, oil, and natural gas. - Fuel demand curves are primarily constant elasticity specifications; fuel price elasticities are typically "between about -0.5 and -0.8". - Carbon emissions factors by fuel product are from IEA. - Domestic environmental costs of fuel use are based on IMF methodologies. - Treatment of current policy settings: - Current fuel taxes/subsidies and carbon pricing are held constant in real terms in the baseline. - How carbon pricing impacts are modeled: - Impacts depend on (i) proportionate effects on future fuel prices by sector; (ii) a simplified model of fuel switching in power generation; and (iii) own-price elasticities for electricity and other fuels. - Exclusions and special notes: - International aviation and maritime fuels are excluded from the model and from computations of fossil fuel subsidies. - GDP projections exclude the negative growth effects of global climate change. - Any fuel consumption not explicitly allocable to a specific sector was apportioned based on relative sectoral consumption in a country. - A modest adjustment is made for partially permanent structural shifts in the economy caused by the pandemic. ### Model caveats, limitations, and assumptions with numeric specifics - Baseline abstraction: - The model "abstracts from the possibility of mitigation actions (beyond those implicit in recently observed fuel use and price data) in the baseline." - Price-response and technological-change caveats: - Assumed fuel price responses are plausible for modest price changes but may not hold for dramatic price changes that could drive major technological advances or rapid adoption of technologies like carbon capture and storage or direct air capture. - Fuel price responsiveness is assumed "approximately similar across countries" though in practice it may vary with energy-system structure and regulations. - Omitted economic mechanisms: - The model does not explicitly account for upward sloping fuel supply curves, general equilibrium effects (e.g., changes in relative factor prices), or changes in international fuel prices resulting from simultaneous large-country reform. - Abatement cost specifics: - Marginal abatement costs are linearized beyond "prices of $75 per ton" (example given: if $75 reduces emissions in a country by 30 percent below BAU then a 50 percent reduction implies a marginal cost of $75 times 50/30). - Two noted limitations of the abatement cost estimates: - they do not account for interactions between carbon pricing and distortions in the broader fiscal system (which literature shows can on net decrease policy costs if revenues reduce distortive taxes); - they do not account for changes in international fuel prices from global mitigation that can transfer resources between energy-producing and energy-consuming countries. - Parameter consistency: - Parameter values are chosen so that CPAT results are "broadly consistent with those from far more detailed energy models." ### Supplementary tables and country classifications: key numeric definitions and listings - EMDE-L definition: - EMDE-Ls are defined as countries with per capita GDP "below $5,500 in 2020." - Table inventories described (without listing downloadable materials): - Table A1 and A2: classifications of countries by AE/EMDE-H/EMDE-L grouping and within UNFCCC negotiating groups. - Tables A3 and A4: for G20 countries, formal mitigation commitments in NDCs and impacts of carbon pricing on energy prices. - Table A5: effectiveness of alternative mitigation instruments at reducing CO2. - The content includes a country-by-country listing of AE, EMDE-H, and EMDE-L groupings as presented in the source material. *Source: clnea2021005 - References (IMF Staff Climate Notes and annex content provided in the source PDF).* ### Annex I ### Annex I ### Annex I and Non-Annex I Parties (table listing) - The Annex lists parties under the heading "Annex I / Non-Annex I". Parties appear in two aligned columns. Entries (as presented) include: - AustraliaAfghanistanGuatemalaPapua New Guinea - AustriaAlbaniaGuineaParaguay - BelarusAlgeriaGuinea-BissauPeru - BelgiumAndorraGuyanaPhilippines - BulgariaAngolaHaitiQatar - CanadaAntigua and BarbudaHondurasCongo, Republic of - CroatiaArgentinaIndiaRwanda - CyprusArmeniaIndonesiaSt. Kitts and Nevis - Czech RepublicAzerbaijanIranSt. Lucia - DenmarkBahrainIraqSt. Vincent & Grenadines - EstoniaBangladeshIsraelSamoa - FinlandBarbadosCôte d'IvoireSan Marino - FranceBelizeJamaicaSão Tomé and Príncipe - GermanyBeninJordanSaudi Arabia - GreeceBhutanKazakhstanSenegal - HungaryBoliviaKenyaSerbia - IcelandBosnia and HerzegovinaKiribatiSeychelles - IrelandBotswanaKuwaitSierra Leone - ItalyBrazilKyrgyz RepublicSingapore - JapanBruneiLao P.D.R.Solomon Islands - LatviaBurkina FasoLebanonSomalia - LiechtensteinBurundiLesothoSouth Africa - LithuaniaCambodiaLiberiaKorea - LuxembourgCameroonLibyaSouth Sudan - MaltaCabo VerdeMadagascarSri Lanka - MonacoCentral African RepublicMalawiSudan - NetherlandsChadMalaysiaSuriname - New ZealandChileMaldivesSwaziland - NorwayChinaMaliSyria - PolandColombiaMarshall IslandsTajikistan - PortugalComorosMauritaniaTanzania - RomaniaCook IslandsMauritiusThailand - RussiaCosta RicaMexicoBahamas, The - Slovak RepublicCubaMoldovaGambia, The - SloveniaCongo, Dem. RepublicMongoliaTogo - SpainDjiboutiMontenegroTonga - SwedenDominicaMoroccoTrinidad and Tobago - SwitzerlandDominican RepublicMozambiqueTunisia - TurkeyTimor-LesteMyanmarTurkmenistan - UkraineEcuadorNamibiaTuvalu - United KingdomEgyptNauruUnited Arab Emirates - United StatesEl SalvadorNepalUganda - Equatorial GuineaNicaraguaUruguay - EritreaNigerUzbekistan - EthiopiaNigeriaVanuatu - MicronesiaNiueVenezuela - FijiNorthern MacedoniaVietnam - French Polynesia (France)OmanYemen - GabonPakistanZambia - GeorgiaPalauZimbabwe - GhanaPalestine - GrenadaPanama ### Selected Negotiating Groups (Table A2 — UNFCCC Parties – Part 2 – Selected Negotiating Groups) - Source lists negotiating groups and member parties under headings including African Group, AOSIS, Arab States, G77+China, LMDCs, BASIC, with country-level entries aligned beneath each group. Example entries as presented include: - African Group examples: Algeria; Angola; Benin; Botswana; Burkina Faso; Cabo Verde; Burundi; Cameroon; Central African Republic; Chad; Comoros; Congo, Democratic Republic of the; Congo, Republic of the; Cote d'Ivoire; Djibouti; Equatorial Guinea; Eritrea; Ethiopia; Gabon; Gambia, The; Ghana; Guinea; Guinea-Bissau; Kenya; Lesotho; Liberia; Madagascar; Malawi; Mali; Mauritania; Mauritius; Morocco; Mozambique; Namibia; Niger; Nigeria; Rwanda; Sao Tomé and Principe; Senegal; Seychelles; Sierra Leone; Somalia; South Africa; South Sudan; Sudan; Swaziland; Tanzania; Togo; Tunisia; Uganda; Zambia; Zimbabwe. - AOSIS examples: Antigua and Barbuda; Bahamas, The; Barbados; Belize; Cook Islands; Cuba; Dominica; Dominican Republic; Fiji; Grenada; Jamaica; Kiribati; Maldives; Marshall Islands; Micronesia; Nauru; Niue; Palau; Papua New Guinea; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Samoa; Seychelles; Solomon Islands; Tonga; Trinidad and Tobago; Tuvalu; Vanuatu. - Arab States examples: Algeria; Bahrain; Comoros; Djibouti; Egypt; Iraq; Jordan; Kuwait; Lebanon; Libya; Mauritania; Morocco; Oman; Palestine; Qatar; Saudi Arabia; Somalia; Sudan; Syria; Tunisia; United Arab Emirates; Yemen. - G77+China examples: Argentina; Bangladesh; Belize; Bolivia; Brazil; China; Colombia; Costa Rica; Cuba; Dominica; Dominican Republic; Ecuador; El Salvador; Guatemala; Guyana; India; Indonesia; Iran; Jamaica; Kenya; Madagascar; Mexico; Morocco; Nicaragua; Pakistan; Panama; Paraguay; Peru; Philippines; South Africa; Suriname; Venezuela; Vietnam; Zambia. - LMDCs examples: Algeria; Bangladesh; Bolivia; China; Congo, Dem. Rep. of; Cuba; Ecuador; India; Indonesia; Iran; Malaysia; Nepal; Nicaragua; Pakistan; Peru; Sudan; Syria; Venezuela; Yemen. - BASIC examples: Brazil; China; India; South Africa. - Note: Table entries are presented as sourced from Carbon Brief (2015) and UNFCCC (2021b). ### Mitigation Pledges for the Paris Agreement, G20 Countries (Table A3) - Notes: BAU = business as usual; CO2 = carbon dioxide; GHG = greenhouse gas; na = not applicable; NDCs = nationally determined contributions. a ’First' and 'second round' refers to whether mitigation pledge in latest NDC was submitted in 2015/16 or has been updated in 2020/21, respectively. b Targets conditional on international support are in brackets. c EU-wide target. d Target has been announced but is not yet featured in policy documents. - Country-level entries (Submission Round, Latest Mitigation Pledge for Paris Agreement, Net Zero Target): - Argentina — Second — Net emissions cap of 359 MtCO2e in 2030 — 2050d - Australia — Second — Reduce GHGs 26-28% below 2005 by 2030 — 2050d - Brazil — Second — Reduce GHGs 43% below 2005 by 2030 — 2050 - Canada — First — Reduce GHGs 30% below 2005 by 2030 — 2050 - China — First — Reduce CO2/GDP 65% below 2005 by 2030 — 2060 - France — Second — Reduce GHGs 55%c below 1990 by 2030 — 2050c - Germany — Second — Reduce GHGs 65% below 1990 by 2030 — 2045 - India — First — Reduce GHG/GDP 33-35% below 2005 by 2030 — na - Indonesia — First — Reduce GHGs 29%(41%) below BAU in 2030 — na - Italy — Second — Reduce GHGs 55%c below 1990 by 2030 — 2050c - Japan — Second — Reduce GHGs 25.4% below 2005 by 2030 — 2050 - Korea — Second — Reduce GHGs 40% below 2017 by 2030 — 2050 - Mexico — Second — Reduce GHGs 22% (36%) below BAU in 2030 — 2050d - Russia — First — Reduce GHGs to 70% of 1990 level by 2030 — 2060d - Saudi Arabia — Second — Reduce GHGs 278 MtCO2e below BAU by 2030 — 2060d - South Africa — Second — Reduce GHGs to 350-420 MtCO2e in 2025 and 2030 — 2050d - Turkey — First — Reduce GHGs 20% (25%) below BAU by 2030 — na - United Kingdom — Second — Reduce GHGs 68% below 1990 by 2030 — 2050 - United States — Second — Reduce GHGs 50-52% below 2005 by 2025 — 2050 ### Energy Price Impacts of $75/50/25 per ton Carbon Price in AE/EMDE-H/EMDE-Ls, 2030 (Table A4) - Note: Baseline prices are retail prices estimated in Parry, Black and Vernon (2021) and include preexisting energy taxes. Impacts of carbon taxes on electricity prices depend on the emissions intensity of power generation. GJ = gigajoule; kWh = kilowatt-hour. - Table columns: Country — Coal Baseline Price, $/GJ — Coal Price Increase, percent — Natural Gas Baseline Price, $/GJ — Natural Gas Price Increase, percent — Electricity Baseline Price, $/kWh — Electricity Price Increase, percent — Gasoline Baseline Price, $/liter — Gasoline Price Increase, percent. - Country entries (as presented): - Argentina — 2.9 — 172 — 7.6 — 57 — 0.12 — 27 — 1.33 — 11 - Australia — 2.9 — 291 — 13.4 — 49 — 0.22 — 60 — 1.28 — 16 - Brazil — 3.9 — 132 — 7.1 — 19 — 0.17 — 4 — 1.65 — 6 - Canada — 2.1 — 358 — 5.2 — 107 — 0.11 — 22 — 1.17 — 17 - China — 5.9 — 80 — 11.0 — 49 — 0.11 — 42 — 1.09 — 12 - France — 6.5 — 116 — 18.5 — 26 — 0.15 — 3 — 1.86 — 12 - Germany — 4.2 — 191 — 17.1 — 32 — 0.27 — 17 — 1.85 — 11 - India — 1.8 — 137 — 5.0 — 118 — 0.13 — 40 — 1.25 — 5 - Indonesia — 2.6 — 119 — 10.4 — 15 — 0.10 — 59 — 0.49 — 33 - Italy — 4.4 — 183 — 16.8 — 36 — 0.24 — 22 — 1.93 — 12 - Japan — 5.3 — 139 — 20.0 — 22 — 0.20 — 37 — 1.48 — 14 - Mexico — 3.3 — 154 — 5.1 — 86 — 0.12 — 31 — 1.14 — 12 - Russia — 2.1 — 220 — 3.7 — 188 — 0.13 — 105 — 0.86 — 16 - Saudi Arabia — 8.7 — 8.7 — 57 — 0.10 — 119 — 0.41 — 91 - South Africa — 0.9 — 237 — 11.5 — 11 — 0.06 — 52 — 1.03 — 5 - Korea — 5.5 — 138 — 12.8 — 45 — 0.11 — 75 — 1.40 — 13 - Turkey — 3.8 — 127 — 9.6 — 34 — 0.10 — 38 — 1.18 — 12 - United Kingdom — 5.1 — 153 — 14.2 — 32 — 0.22 — 12 — 2.24 — 10 - United States — 2.8 — 278 — 5.3 — 94 — 0.12 — 42 — 0.91 — 22 - Simple Average — 3.9 — 170 — 10.7 — 57 — 0.11 — 39 — 1.29 — 17 ### CO2 Reductions from Alternative Mitigation Instruments Relative to BAU, 2030 (Table A5) - Note: All policies impose the same explicit or implicit $50 price on the CO2 emissions they reduce. The combination policy reduces emissions intensity in the power and vehicle sector and improves the efficiency of other energy using products (but does not promote demand responses like less driving). - Table columns: Country — Carbon tax — ETS — Coal excise — Electricity excise — Road fuel tax — Feebates / regulations - Country entries (values presented exactly, hyphen-separated): - Argentina — -17-8-1-3-1-11 - Australia — -22-18-17-8-1-16 - Brazil — -12-6-40-1-11 - Canada — -20-8-6-1-1-14 - China — -25-20-24-50-19 - France — -11-2-40-4-6 - Germany — -17-10-12-1-3-12 - India — -37-32-34-110-28 - Indonesia — -30-23-22-8-3-21 - Italy — -11-5-4-1-2-7 - Japan — -15-10-11-40-10 - Mexico — -15-9-3-5-1-10 - Russia — -30-14-12-40-20 - Saudi Arabia — -32-170-14-4-17 - South Africa — -41-30-40-110-30 - Korea — -19-14-16-40-14 - Turkey — -21-14-16-40-15 - United Kingdom — -13-5-5-1-3-9 - United States — -19-13-10-4-1-14 - Simple average — -21-14-13-5-1-15 - Weighted (emissions) average — -24-18-19-5-1-18 *NOTES: Not Yet on Track to Net Zero: The Urgent Need for Greater Ambition and Policy Action to Achieve Paris Temperature Goals — IMF STAFF CLIMATE NOTE 2021/005* --- _Source: https://www.imf.org/-/media/files/publications/staff-climate-notes/2021/english/clnea2021005.pdf_