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### Introduction — global context, Türkiye relevance, and modelling approach
- Global mitigation targets:
  - Limiting warming to 2°C or 1.5°C requires cutting global CO2 and other GHGs 25 or 50 percent below 2019 levels by 2030, followed by rapid decline to net zero near mid-century.
  - Current national targets achieve only 13 percent emissions cuts below 2019 levels.
  - Observed global warming to date is 1.2oC; tipping point risks rise exponentially above 1.5oC.
- Türkiye context:
  - Türkiye ratified the 2015 Paris Agreement in October 2021 and set a net zero emissions target for 2053.
  - Ambitious mitigation strategy with carbon pricing can mobilize revenues, reduce local air pollution deaths, reduce poverty, and position Türkiye as a mitigation leader.
  - Potential strategy elements: align intermediate targets with neutrality, emissions pricing (likely trading), measures to enhance acceptability, supportive policies for coal-to-renewables shift and transport electrification.
- Modelling needs and CPAT:
  - Choosing a 2030 target requires BAU projections and costs of cutting emissions below BAU; sensitive to GDP growth, income elasticities, BAU energy prices, fuel price responsiveness.
  - The paper uses the Climate Policy Assessment Tool (CPAT), parameterized to mid-range literature values, to project fuel use, CO2 emissions, and impacts of carbon pricing across sectors for 200 countries (model described in Annex A).
- Role of carbon pricing:
  - Pricing provides economywide incentives to reduce energy use and redirect investment to clean technologies; paper assesses emissions, fiscal, and economic impacts quantitatively.
- Energy price environment:
  - Between mid-2020 and mid-2022: natural gas +700 percent; coal +180 percent; oil +110 percent.
  - Illustration: a carbon tax starting at $10 in 2022 rising to $75 in 2030 is assumed fully passed to demand prices.

### National emissions trends and targets — Türkiye (selected findings)
- Per capita and absolute emissions (2020):
  - Türkiye’s GHG emissions: 5.9 tonnes of CO2e per capita in 2020.
  - Global average: 6.1 tonnes per capita; OECD average: 10.3 tonnes.
  - Türkiye was the eighteenth largest global emitter in 2020: 495 million tonnes of GHGs, 1 percent of global total.
- Historical and BAU projections:
  - GHG emissions increased 138 percent between 1990 and 2019.
  - IMF staff estimates BAU emissions will decrease by 27 percent between 2019 and 2030.
  - Macroeconomic and intensity drivers (2019–2030):
    - GDP projected to grow by approximately 44 percent in real terms between 2019 and 2030.
    - CO2 emissions intensity of GDP declines 42 percent over this period.
  - Comparison: aside from India, other G20 countries projected CO2 emissions growth ~0-20 percent over this period.
- National targets and comparisons:
  - Türkiye NDC projects BAU GHG emissions of 1175 million tonnes in 2030 — 175 percent higher than IMF BAU projections.
  - Authorities expected electricity demand to double by 2030; IMF projects 16 percent growth.
  - Emissions-neutrality linear pathway (2022–2053) implies reducing GHGs 28 percent relative to 2021 to 292 million tonnes in 2030.
  - First NDC pledged 929 million tonnes in 2030 (21 percent below authorities’ BAU).
  - COP27 announcement: new target reduction of 41 percent compared to BAU → about 693 million tonnes in 2030.
  - Even updated target is about 70 percent higher than IMF BAU projections.

### Energy-related CO2 emissions — sectoral and fuel breakdown (2020) and trends
- Shares and sinks:
  - Energy-related CO2 emissions accounted for 73 percent of Türkiye’s (non-land use) GHGs in 2020.
  - Sectoral shares in 2020:
    - Power generation: 21 percent of GHGs
    - Industry fossil fuel CO2: 24 percent
    - Transport: 15 percent
    - Buildings: 13 percent
    - Industrial process emissions (e.g., cement): 11 percent
    - Agriculture: 13 percent
    - Waste: 3 percent
  - By fuel type (share of fossil fuel CO2 emissions):
    - Coal: 45 percent
    - Oil: 30 percent
    - Natural gas: 24 percent
  - LULUCF: net absorbed 82.3 million tonnes in 2020.
- BAU drivers reiterated:
  - IMF projects a 27 percent decline in BAU emissions between 2019 and 2030 driven by ~44 percent real GDP growth and 42 percent decline in CO2 intensity of GDP.

### Illustrative carbon pricing scenarios (CPAT analyses) — price paths and emissions impacts
- Illustrative comprehensive price path:
  - Price starts at $35 per tonne in 2023 and rises to $75 per tonne in 2030.
  - Coverage: fossil fuel CO2 emissions from power, industry, transport, and buildings.
- Estimated emissions reductions in 2030 relative to BAU:
  - $25 per tonne in 2030 → cut fossil fuel CO2 emissions by an estimated 15 percent below BAU in 2030.
  - $50 per tonne in 2030 → cut by an estimated 21 percent below BAU in 2030.
  - $75 per tonne in 2030 → cut by an estimated 26 percent below BAU in 2030.
- Sectoral composition of reductions under $75 per tonne:
  - 41 percent of projected fossil fuel CO2 reduction from power sector.
  - 25 percent from industry sector.
  - 60 percent of projected reduction comes from reduction in coal use.
- Partial coverage scenarios:
  - Limiting $75 price to power and industry (downstream ETS) → economywide CO2 emissions reduced 17 percent (84 percent of comprehensive $75 reductions).
  - Limiting carbon tax to coal only → economywide emissions reduced 12 percent (60 percent of comprehensive $75 reductions).
- Price responsiveness:
  - Fuel price elasticities in CPAT typically around -0.5 to -0.8.
  - Türkiye’s responsiveness broadly representative of other G20 countries; countries with larger coal shares show larger responsiveness.

### Price impacts of a $75 carbon price (Turkey, 2030) — selected figures preserved exactly
- Price changes above BAU levels in 2030:
  - Coal: increase 119.8 percent (Baseline US$ per GJ 6.24 → Price with $75 carbon tax 13.71) — 46.1% share in 2019 energy-related CO2 emissions.
  - Natural gas: increase 34.3 percent (Baseline US$ per GJ 14.58 → 19.58) — 24.6% share.
  - Electricity: increase 6.4 percent (Baseline US$ per kwh 0.11 → 0.12) — 0.0% share.
  - Gasoline: increase 17.5 percent (Baseline US$ per liter 1.19 → 1.40) — 1.8% share.
  - Diesel: increase 21.8 percent (Baseline US$ per liter 1.09 → 1.33) — 19.5% share.
  - LPG: increase 21.4 percent (Baseline US$ per liter 0.73 → 0.89) — 3.6% share.
  - Kerosene: increase 27.0 percent (Baseline US$ per liter 0.82 → 1.04) — 1.0% share.
  - Oil (per barrel): increase 61.3 percent (Baseline US$ per barrel 57.39 → 92.60) — 3.4% share.

### Revenues, fiscal impacts, and macro gains (2030)
- Revenue potential from a $75 carbon price in 2030:
  - Could raise projected revenues of 1.7 percent of GDP ($20 billion).
  - Revenue composition: 39 percent from coal charges; 30 percent from natural gas; 31 percent from diesel and other oil products.
- Lower price scenarios:
  - $25 per tonne → raise revenues of 0.9 of GDP in 2030.
  - $50 per tonne → raise revenues of 1.3 of GDP in 2030.
- Notes: calculations account for erosion of revenue from pre-existing fuel taxes.

### Health, domestic co-benefits, and net costs (2030, cumulative 2021–30 for deaths)
- Health and co-benefits:
  - Cumulated over 2021–30, price rising to $75 per tonne by 2030 would save a projected 11,000 premature fatalities from local air pollution exposure.
    - 71 percent of avoided deaths are people over age 65.
    - 79 percent are in urban areas.
  - Projected annualized abatement costs from $75 carbon price: 0.3 percent of GDP in 2030.
  - Domestic environmental co-benefits: 0.4 percent of GDP in 2030 (implying slight net economic gain).
    - 50 percent of these domestic co-benefits reflect fewer local air pollution deaths.
    - 50 percent reflect reductions in other domestic externalities including traffic congestion and accidents.
  - Global climate benefits equivalent to 0.6 percent of GDP using a global climate benefits parameter of $185 per tonne CO2 reduced.

### Competitiveness, CBAM, and EITE industry impacts
- Production cost impacts for EITE industries under $75 carbon price in 2030:
  - Steel and aluminium production costs in Türkiye would increase by 10 and 20 percent respectively (accounting for direct and indirect charges).
  - Production cost increases in China for these industries would be more than twice as large.
- EU CBAM context and implications:
  - EU CBAM phases in from 2026, charging for carbon content of steel, aluminum, cement, fertilizers, and electricity imported into EU.
  - EU CBAM charge per tonne likely aligned with EU ETS allowance price — currently equivalent to $70 per tonne.
  - Payments under EU BCA (in absence of carbon pricing in Türkiye) would amount to a relatively modest 0.02-0.06 percent of GDP under country-specific factors and 0.1-0.03 under domestic emissions factors; electricity sector payments even lower.
- CBAM design guidance:
  - Limit CBAM to EITE industries to focus on vulnerable sectors and contain costs.
  - Rebates for exporters should be industry-benchmarked, not firm-level.
  - Prefer country-specific embodied carbon where feasible; pragmatically use domestic industry emission rates initially.
  - Adjust CBAMs where emissions in trading partner are subject to pricing.

### Distributional impacts, revenue recycling, and household outcomes (2030)
- Assessment method:
  - Two-step approach: input-output table for consumer goods effects (adjusted for future energy efficiency), then map price increases to household budget shares using 2018 household expenditure survey with behavioral adjustments.
- Before recycling (2030):
  - $75 carbon price imposes projected average burden of 3 percent of consumption for the average household.
  - For average household: direct effect ≈ one-third of burden; indirect effect ≈ two-thirds.
- Illustrative revenue recycling scenario (2030):
  - Revenue use: 25 percent targeted unconditional cash transfer to bottom four consumption deciles; 75 percent used to raise basic income tax threshold (reducing labor taxes).
  - Targeting parameters: coverage rate 90 percent; leakage rate 10 percent.
  - Net impacts:
    - Average household: better off by 0.4 percent of consumption after recycling.
    - Bottom four deciles: net benefits about 3-5 percent of consumption.
    - Next three deciles: approximately no better or worse off.
    - Wealthier households: worse off on net by 1.4 percent of consumption.
- Trade-offs:
  - Cutting labor taxes boosts economic activity and discourages informality; lump-sum transfers forgo these effects.

### Firm impacts, abatement costs, and policy tools for competitiveness
- Firm cost components under carbon pricing:
  - Direct charges or allowance purchase for emissions.
  - Indirect charges for carbon embodied in inputs (esp. electricity).
  - Abatement costs for adopting cleaner technologies and fuels.
- At modest abatement, direct and indirect charges exceed abatement costs; this may reverse at deeper decarbonization.
- Policy tools to protect competitiveness and enhance acceptability:
  - CBAMs targeting EITE industries with industry-benchmarked rebates.
  - Feebates or sectoral regulations to reinforce mitigation incentives.
  - Exemptions, free allowances, or tradable emission rate standards as alternative measures, noting trade-offs (forgone revenue, weaker mitigation incentives).

### Sectoral instruments and feebates — power, industry, transport, buildings, extractives, agriculture, forestry, waste
- General points on sectoral instruments:
  - Sectoral measures can address hard-to-abate sectors and political acceptability when carbon pricing is limited.
  - Feebates: sliding-scale fees on above-average emission rates and rebates for below-average rates; revenue-neutral feebates can be more flexible and cost-effective than emission rate regulations.
- Power generation (findings and options):
  - Electricity demand expected to grow "at about 3-4 percent annually."
  - 2019 generation shares: coal 33 percent; gas 17 percent; hydro 26 percent; wind 6 percent; solar 3 percent; geothermal 3 percent; decentralized renewables 12 percent.
  - Türkiye renewable generation target: 73 percent in 2030.
  - Under progressively rising carbon price to $75 per tonne: projected renewable share rises to 67 percent in 2030; coal and gas shares fall to 10 and 23 respectively.
  - Feebate for generators formula: CO2 price × [CO2/kWh ─ pivot point CO2/kWh] × electricity generation.
  - Illustration at $75 per tonne and current emission rates: fee ≈ 2.8 cents/kWh for coal; subsidies of 6 and 2 cents/kWh for renewables and natural gas respectively.
- Industry (findings and feebates):
  - Feebate formula for firms: [CO2 price] × [CO2/output ─ industry-wide average CO2/output] × [firm output]; avoids first-order tax burden on average firm.
  - Box 1 illustrative impacts at $75 per tonne:
    - Steel:
      - Integrated process: ~2 tonnes CO2 per tonne steel; alternatives 0.3–0.4 tonnes CO2 per tonne.
      - $75/tonne increases integrated cost by about $150 per tonne (≈30 percent of recent steel prices); alternatives increase by about $30 per tonne.
      - Under feebate with pivot 1 tCO2/tsteel: integrated cost increases $75/tonne; alternatives receive subsidy ≈ $45/tonne.
    - Cement:
      - Traditional: ~1 tonne CO2 per tonne cement; process emissions ~70 percent.
      - Post- and oxy-combustion reduce emissions ~55 and 85 percent; capital costs +25 and +100 percent respectively.
      - $75/tonne increases traditional cost ≈ $75/tonne (≈60 percent); more efficient and CCUS-fitted plants increase by $45 and $12–35 per tonne respectively.
      - Under feebate at $75/tonne: traditional production cost increases $7/tonne; subsidies to efficient and CCUS plants $15 and $27–47 per tonne.
- Transportation (findings and vehicle feebate):
  - EV target: 1 million EVs on road by 2030; EVs <1 percent of new vehicle sales in 2020.
  - SCT passenger car rates (conventional engines): 45 to 220 percent; EV SCT rates: 10 to 60 percent.
  - Fleet turnover rate for light-duty vehicles: 6.7 percent a year (assumed 15-year life).
  - Vehicle feebate formula: CO2 price × [CO2/km ─ CO2/km of the new vehicle fleet] × [average lifetime vehicle km].
  - Illustration at $600 per tonne CO2 feebate:
    - Subsidy of $7,000 for zero emission vehicles; tax of $5,000 for vehicle with 200 gCO2/km, assuming fleet average 120 gCO2/km.
- Buildings (findings and feebates):
  - Türkiye commitments: decarbonize all new buildings by 2030; existing buildings by 2050.
  - Opportunities: retrofits, solar panels, electric heating, efficient appliances, smart homes.
  - Feebate example for appliances: CO2 price × CO2 per unit of energy × [energy consumption per unit ─ industry-wide energy consumption per unit] × number of units.
  - Feebates could tax oil/gas heating and subsidize electric heat pumps.
- Extractives and methane:
  - Methane emissions: two-thirds from coal mines; one third from gas/oil operations.
  - Illustration: emissions tax of $70 per tonne CO2e on fugitive emissions prior to mitigation would equate to ~ $1.5 per barrel of oil and $0.25 per thousand cubic feet of natural gas.
  - Administration options: metering with inspections or proxy emissions taxes with default factors and rebates for measured lower emissions.
- Agriculture:
  - Agricultural GHG composition 2020: methane from livestock ~50 percent of agricultural GHGs; nitrous oxide from soils ~45 percent.
  - Pricing options: proxy-based pricing using farm-level data and default emissions factors; feebates by hectare or nutritional value; combine fees with revenue-recycled rebates.
  - Household demand levers: taxes on meat and dairy.
- Forestry (LULUCF):
  - LULUCF net sink for Türkiye since 2008; target 30 percent land forest cover by 2023 (current 29 percent).
  - Landowner-focused feebate formula: Fee = [CO2 rental price] × [carbon storage baseline ─ current stored carbon].
  - Recommend rental payments (carbon price × interest rate × years) and rising carbon price over time; partial exemptions for timber harvested for durable wood products.
  - Monitoring: satellite, aerial photography, Light Detection and Ranging (LiDAR), and ground sampling.
- Waste and methane:
  - Zero Waste Project launched 2017; National Waste Management and Action Plan 2016-2023.
  - Mitigation: landfill methane collection/flaring, reduce packaging and food waste, enhance recycling and composting.
  - Pricing methane from waste less compelling; regulation and targeted fiscal incentives preferred.

### Fuel taxes, implicit carbon prices, and sectoral excise observations
- Implicit carbon pricing observations:
  - Gasoline implicit carbon pricing is large; diesel taxed at 1/3 of gasoline rate despite diesel CO2 per liter being 16 percent higher.
  - Result: diesel vehicles are ~half of new car sales.
  - Natural gas residential subsidy equivalent to a negative CO2 price of $133 per tonne.
  - IMF staff: a tax on coal use in power and industry would have about 70 percent of mitigation effectiveness of an equivalently scaled carbon price on all fossil fuels.

### CPAT (Annex A) — model mechanics, data, and limitations
- CPAT overview:
  - Joint IMF-World Bank platform for 200+ countries; projects fuel use and CO2 emissions for power, industry, transport, buildings.
  - BAU projections based on observed fuel use, GDP projections, income elasticities, price responsiveness, rate of technological change, and future international energy prices.
  - Current carbon pricing, non-pricing policies, and fuel taxes held fixed in real terms at 2021 levels.
  - Pass-through of carbon charges into user prices generally 100 percent, with country exceptions using pass-through 0.25, 0.5, or 0.75 for SOE/regulated cases.
- Sectoral modeling details preserved:
  - Power: averaged over a simplified fuel-choice model and a technology-explicit hybrid economic-engineering model; includes dispatch and investment, maximum annual renewable scale-up constraints, district heating.
  - Industry: disaggregated into eight industries; carbon pricing reduces intensity and output.
  - Transport: dynamic capital-turnover model with ICEV vs EV; fleet turnover 6.7 percent/year.
  - Buildings: decomposition into energy/CO2 intensity and behavioral changes; replacement rates 1.8 percent (commercial) and 1.2 percent (residential).
- Data, calibration, and parameters:
  - CPAT uses IEA and other sources (latest data 2019); GDP projections from IMF forecasts; international fuel prices averaged from IEA and IMF mid-2021 projections.
  - Fuel and electricity price elasticities generally between -0.5 and -0.8.
  - Emissions factors by fuel from IIASA (2021); calibration uses UNFCCC, EC-JRC, Global Carbon Budget and other sources.
- Behavioral and instrument effects:
  - Comprehensive pricing promotes broad economywide responses; non-pricing instruments promote narrower/lagged responses.
- Limitations and caveats:
  - Uncertainty grows for large policy changes enabling non-linear technology adoption (e.g., CCS, direct air capture).
  - CPAT does not explicitly account for international feedbacks on trade patterns or international fuel prices from simultaneous reforms in large countries.
  - Cost estimates for CCS and direct air capture cited as highly speculative.

### Summary of key policy recommendations (explicit preserved figures)
- Define a GHG emissions target of around 290-300 million tonnes for 2030 in line with Türkiye’s net zero target for 2053.
- Implement a comprehensive carbon price (carbon tax or ETS) rising progressively to $75 per tonne by 2030.
- Use revenues from the carbon price for reductions in labor income taxes and targeted support to low-income households (after recycling the average household is better off by 0.4 percent).
- Consider a border carbon adjustment to preserve competitiveness of energy-intensive, trade-exposed industries.
- Consider feebates to reinforce mitigation incentives in power and industry sectors without a significant tax burden on the average firm.
- Integrate a feebate into the vehicle registration tax system to promote clean vehicle adoption.
- Consider feebates to promote energy efficient appliances and integrate into property taxes to encourage building renovations.
- Consider proxy emissions pricing schemes for extractive and agricultural sectors and a feebate for the forestry sector.

*Italic source: IMF Working Papers — Climate Mitigation Policy in Türkiye (Content unit: wpiea2023108-print-pdf).*

### 1. Introduction ........................................................................................................

### 1. Introduction

### Global mitigation context and urgency
- Limiting global warming to 2°C or 1.5°C requires cutting global CO2 and other GHGs 25 or 50 percent below 2019 levels by 2030, followed by a rapid decline to net zero emissions near the middle of this century.
- Current national targets achieve only 13 percent emissions cuts below 2019 levels; without new mitigation policies, global emissions are projected to continue rising in the business as usual (BAU) case.
- Observed global warming to date is 1.2oC and is caused by human factors; risks of tipping points rise exponentially with warming above 1.5oC.
- There is a large global ambition gap and a larger policy implementation gap:
  - 136 countries, representing 88 percent of global GHGs, have proposed, or set, net zero targets for around mid-century.
  - Even if intermediate pledges for 2030 in countries’ NDCs were fully achieved, they would only reduce global CO2 emissions 13 percent below 2019 levels.

### Relevance and national interest for Türkiye
- Ambitious climate policy is potentially in Türkiye’s national interest: a comprehensive mitigation strategy with carbon pricing as its centerpiece can mobilize government revenues, save lives by reducing local air pollution exposure, reduce poverty, and position Türkiye as a leader in combating the global climate challenge.
- Türkiye ratified the 2015 Paris Agreement in October 2021 and set a net zero emissions target for 2053.
- Potential key elements of Türkiye’s strategy will include:
  - aligning intermediate emissions targets with long-term neutrality;
  - emissions pricing, likely in the form of trading;
  - measures to enhance the acceptability of pricing;
  - supportive policies to reinforce shifts from coal to renewables and electrification of transportation.

### Modelling needs and approach
- Choosing a revised emissions target for 2030 requires:
  - (i) BAU emissions projections at economywide and sectoral level; and
  - (ii) the costs of cutting emissions below BAU levels.
- Both are sensitive to assumptions about GDP growth, income elasticities for energy products, future BAU energy prices, and fuel price responsiveness.
- The paper uses a flexible spreadsheet model—the Climate Policy Assessment Tool (CPAT)—parameterized to the mid-range of the broader energy modelling literature to illustrate implications of alternative assumptions.
- CPAT provides consistent cross-country projections for 200 countries of fuel use and CO2 emissions by major energy sectors and the emissions, fiscal, economic, and distributional impacts of carbon pricing and other mitigation instruments (model described in Annex A).

### Role of carbon pricing and instrument design issues
- Achieving substantial emissions reductions will likely require carbon pricing because it:
  - provides across-the-board incentives to reduce energy use and shift to cleaner energy sources;
  - delivers the critical price signal for redirecting investment to clean technologies.
- Key technical issues in choosing and designing carbon pricing instruments (carbon taxes vs ETS) include:
  - administration and price levels;
  - relation to other mitigation instruments;
  - use of revenues to address efficiency and distributional objectives;
  - supporting measures for competitiveness; and
  - extension to broader emissions sources.
- The paper presents an extensive quantitative assessment of emissions, fiscal, and economic impacts of carbon pricing.

### Energy price environment and implications for acceptability
- Global fuel price changes between mid-2020 and mid-2022:
  - natural gas increased about 700 percent;
  - coal increased about 180 percent;
  - oil increased about 110 percent.
- High energy prices pose a challenge for political acceptability of carbon pricing, but projections suggest fuel prices will decline gradually over time as demand and supply adjust, providing an opportunity for phased carbon price increases.
- Illustration: phasing in a $75 carbon price on top of projected prices would imply 2030 gas prices that are 32 percent below mid-2022 levels, while oil and coal prices would be 3 and 28 percent higher respectively.
- The illustrative carbon tax in the figure starts at $10 in 2022 and rises to $75 in 2030; it is assumed to be fully passed forward into demand prices.

### Enhancing acceptability through revenue use and complementary policies
- Acceptability can be enhanced by exploiting revenue potential (e.g., auctioning allowances in an ETS) and using revenues to:
  - boost economic activity (e.g., cutting labor taxes);
  - address distributional concerns (e.g., targeting revenues to low-income households).
- It is also important to address impacts on industrial competitiveness; the paper quantitatively analyzes distributional burdens on households and firms under different scenarios for energy prices, carbon pricing, and revenue recycling.
- The paper discusses carbon border adjustment mechanisms (BCAs) in Türkiye and the EU and other measures to address competitiveness concerns.

### Role of sectoral instruments
- Reinforcing sectoral instruments can help address hard-to-abate sectors and acceptability constraints when carbon pricing is limited.
- Sectoral instruments are less efficient than economywide carbon pricing but may have greater acceptability as they avoid significant increases in energy prices.
- The paper discusses the potential use of feebates (fiscal analogues of emission rate or energy efficiency regulations) for power, industry, transport, buildings, forestry, and agriculture.

### Organization and scope of the paper
- The paper’s structure:
  - national emissions trends and targets (Section 2);
  - conceptual issues in choice and design of carbon pricing (Section 3);
  - estimates of emissions, fiscal, and cost impacts of carbon pricing (Section 4);
  - distributional impacts and measures to assist households and firms (Section 5);
  - complementary sectoral instruments (Section 6);
  - summary of recommendations (Section 7).
- Some issues are beyond the scope of the paper, including financial sector policies and technology-related market failures.

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### 2. National Emissions Trends and Targets (Selected Findings)

- Türkiye’s per capita and absolute emissions:
  - Türkiye’s GHG emissions amounted to 5.9 tonnes of CO2e per capita in 2020, compared with a global average of 6.1 tonnes per capita and an OECD average of 10.3 tonnes.
  - Türkiye was the eighteenth largest global emitter in absolute terms in 2020, producing 495 million tonnes of GHG emissions or 1 percent of the global total.
- Türkiye’s actions to mitigate emissions are significant at the global level and could catalyze mitigation action among other emerging market economies.

*Italic source: IMF Working Papers — Climate Mitigation Policy in Türkiye (Content unit: wpiea2023108-print-pdf - 1. Introduction).*

### 14.      Energy-related CO

### 14. Energy-related CO2 emissions

### Overview of 2020 emissions by sector and fuel
- Energy-related CO2 emissions accounted for 73 percent of Türkiye’s (non-land use) GHGs in 2020.
- Sectoral shares in 2020:
  - Power generation: 21 percent of GHGs
  - Industry fossil fuel CO2: 24 percent
  - Transport: 15 percent
  - Buildings: 13 percent
  - Industrial process emissions (e.g., from cement): 11 percent
  - Agriculture: 13 percent
  - Waste: 3 percent
- By fuel type (share of fossil fuel CO2 emissions):
  - Coal: 45 percent
  - Oil: 30 percent
  - Natural gas: 24 percent
- Land-use, land use change, and forestry (LULUCF) on net absorbed 82.3 million tonnes of emissions in 2020 (measurement less accurate and more contentious than for energy-related CO2 emissions).

### Historical trends and BAU projections
- GHG emissions in Türkiye increased 138 percent between 1990 and 2019.
- IMF staff estimates BAU emissions will decrease by 27 percent between 2019 and 2030.
- Macroeconomic and intensity drivers (2019–2030):
  - GDP projected to grow by approximately 44 percent in real terms between 2019 and 2030.
  - CO2 emissions intensity of GDP declines 42 percent over this period, reflecting gradual improvements in energy efficiency and demand for electricity and fuels increasing by less than in proportion to GDP.
- Comparison with other G20 countries: aside from India, projected CO2 emissions growth in other G20 countries over this period is around 0-20 percent.

### National targets, NDCs, and comparison with IMF projections
- Türkiye’s Nationally Determined Contribution (NDC) projects BAU GHG emissions of 1175 million tonnes in 2030, which is 175 percent higher than the IMF BAU projections.
  - Part of the difference reflects the government expecting electricity demand to double by 2030, while the IMF projects growth of 16 percent.
- Türkiye’s current 2030 pledge is not aligned with net zero in the long term; IMF projects the 2030 target will be met in the BAU without mitigation action.
- Emissions-neutrality linear pathway for Türkiye: between 2022 and 2053 would imply reducing GHGs 28 percent relative to 2021 levels to 292 million tonnes in 2030.
- Türkiye’s first NDC pledged to limit emissions to 929 million tonnes in 2030 (21 percent below the authorities’ own BAU projection).
- At COP27, Türkiye announced a new target reduction of 41 percent compared to BAU, approximately limiting GHG emissions at 693 million tonnes in 2030.
- Even the updated target is about 70 percent higher than the IMF BAU projections.

### Local air pollution and health impacts
- Baseline deaths from local air pollution are projected to reach 9,700 a year by 2030.
- Estimated GDP loss from these air pollution impacts is approximately 2.7 bn USD (mostly from outdoor air pollution).
- Coal and diesel combustion cause emissions of fine particulates (directly and indirectly through SO2 and NOx), while gas and gasoline combustion cause much smaller amounts.
- Fine particulates elevate mortality risks from various heart and lung diseases and strokes, especially for seniors with pre-existing conditions.

### Carbon pricing: rationale
- Carbon pricing is presented as the most cost-effective mitigation policy and ideally the centerpiece of Türkiye’s mitigation strategy because:
  - If comprehensively applied, pricing reflects the cost of carbon emissions in the prices of fuels, electricity, and goods and mobilizes the full range of behavioral responses across households, firms, and sectors.
  - Pricing provides the critical price signal for mobilizing innovation into, and deployment of, clean technologies.
  - Pricing mobilizes a valuable source of revenue, which can be used to help meet climate, social, or broader fiscal objectives.
  - Pricing generates domestic environmental co-benefits, such as reductions in local air pollution deaths.

### Instrument choice and design issues
- Carbon taxes versus ETSs:
  - Carbon taxes (generally under finance ministries) are easier to administer than ETSs (generally under environment ministries).
  - Carbon taxes can be integrated midstream into collection procedures for existing fuel taxes; fuel taxes are well established in Türkiye.
  - ETSs typically require more sophisticated administration to monitor downstream emissions and emissions trading markets; they have often been applied to large power and industrial firms but can be extended midstream to transportation and building fuel suppliers.
  - In pure forms, carbon taxes provide price certainty and ETSs provide emissions certainty; price volatility in ETSs can deter private innovation, though ETSs can include price stability mechanisms (e.g., price floors).
  - Revenue mobilization is more robust under carbon taxes because revenues accrue to finance ministries and can be used for fiscal priorities; under ETSs auctions could transfer revenues to finance ministries but free allowance allocations are common in practice.
  - Carbon taxes are more compatible with overlapping mitigation instruments (e.g., feebates, feed-in tariffs); under a pure ETS, overlapping instruments can lower the emissions price without affecting emissions.
  - ETS advantages: help achieve emissions targets with more certainty, align with environment ministry purview, and free allowance allocation may help garner industry support.
- Hybrid approaches:
  - An ETS could address power and industry emissions while a carbon tax covers transportation and building sectors; cost effectiveness requires aligning carbon prices across tax and ETS (e.g., setting ETS price floors equal to carbon tax trajectory).

### Global carbon pricing context and coverage
- To date:
  - 21 carbon taxes and 6 ETSs have been implemented at the national level; the EU ETS prices emissions in all EU (and 3 other) countries.
  - Major pricing initiatives were recently launched in China and Germany.
  - Prices in the EU ETS are currently around the equivalent of US $70 per tonne.
  - Canada has committed to an equivalent US$140 price by 2030.
- Coverage and prices:
  - GHG emissions subject to national and sub-national carbon pricing vary from below 30 percent to over 70 percent in some countries.
  - Only 21 percent of global GHGs are formally subject to pricing (16 percent through ETSs and 5 percent through taxes).
  - The global average carbon price is $5 per tonne.
- Many countries are also implementing non-pricing instruments (vehicle emission rate standards, incentives for renewables and electric vehicles, net zero requirements for new buildings).

### Impacts of an illustrative carbon price path
- Illustrative price path analyzed (CPAT):
  - Price starts at $35 per tonne in 2023 and rises progressively to $75 tonne in 2030, covering fossil fuel CO2 emissions from the power, industry, transport, and building sectors.
  - The price path is hypothetical and chosen because it is just sufficient to achieve the recommended emissions target in 2030.
- Estimated emissions reductions in 2030 relative to BAU for Türkiye:
  - $25 per tonne in 2030: cut fossil fuel CO2 emissions by an estimated 15 percent below BAU levels in 2030.
  - $50 per tonne in 2030: cut fossil fuel CO2 emissions by an estimated 21 percent below BAU levels in 2030.
  - $75 per tonne in 2030: cut fossil fuel CO2 emissions by an estimated 26 percent below BAU levels in 2030.
- Emissions price responsiveness:
  - Türkiye’s responsiveness is broadly representative of other G20 countries.
  - Countries with larger coal shares (e.g., China, India, South Africa) show somewhat larger responsiveness because carbon pricing disproportionately impacts coal prices or because of lower BAU energy prices implying a larger proportionate price increase from carbon pricing.

*Source: IMF staff (Climate Policy Assessment Tool analyses and IMF Working Paper excerpt).*

### 32.      A $75 carbon price has a large impact on coal prices and intermediate impacts on prices for

### 32.      A $75 carbon price has a large impact on coal prices and intermediate impacts on prices for

### Price impacts (Turkey, 2030)
- Coal prices increase by a projected 120 percent above BAU levels in 2030.
- Electricity prices increase by 6.4 percent above BAU levels in 2030.
- Natural gas prices increase by 34.3 percent above BAU levels in 2030.
- Gasoline prices increase by 17.5 percent above BAU levels in 2030.
- Table 2 (selected entries) — Energy Price Increases from $75 Carbon Price, 2030:
  - Gasoline: Baseline price US$ per liter 1.19 → Price with $75 carbon tax 1.40 → % change 17.5% → Share in energy-related CO2 emissions in 2019 1.8%
  - Diesel: Baseline price US$ per liter 1.09 → Price with $75 carbon tax 1.33 → % change 21.8% → Share in energy-related CO2 emissions in 2019 19.5%
  - LPG: Baseline price US$ per liter 0.73 → Price with $75 carbon tax 0.89 → % change 21.4% → Share in energy-related CO2 emissions in 2019 3.6%
  - Kerosene: Baseline price US$ per liter 0.82 → Price with $75 carbon tax 1.04 → % change 27.0% → Share in energy-related CO2 emissions in 2019 1.0%
  - Oil: Baseline price US$ per barrel 57.39 → Price with $75 carbon tax 92.60 → % change 61.3% → Share in energy-related CO2 emissions in 2019 3.4%
  - Coal: Baseline price US$ per gigajoule (GJ) 6.24 → Price with $75 carbon tax 13.71 → % change 119.8% → Share in energy-related CO2 emissions in 2019 46.1%
  - Natural gas: Baseline price US$ per gigajoule (GJ) 14.58 → Price with $75 carbon tax 19.58 → % change 34.3% → Share in energy-related CO2 emissions in 2019 24.6%
  - Electricity: Baseline price US$ per kwh 0.11 → Price with $75 carbon tax 0.12 → % change 6.4% → Share in energy-related CO2 emissions in 2019 0.0%

### Emissions reductions and sectoral contributions (Turkey, 2030)
- Under the $75 carbon price:
  - 41 percent of the projected reduction in fossil fuel CO2 emissions comes from the power sector.
  - 25 percent of the projected reduction in fossil fuel CO2 emissions comes from the industry sector.
  - 60 percent of the projected reduction in fossil fuel CO2 emissions comes from the reduction in coal use.
- Limiting the $75 carbon price to the power and industry sectors (downstream ETS scenario) would reduce economywide CO2 emissions 17 percent (84 percent of reductions under comprehensive $75 carbon price).
- Limiting a carbon tax to coal only would reduce economywide emissions 12 percent (60 percent of reductions under comprehensive $75 carbon price).
- Fuel price elasticities in CPAT are typically around -0.5 to -0.8.

### Revenues and fiscal impacts
- A $75 carbon price could raise projected revenues of 1.7 percent of GDP ($20 billion) in 2030.
  - 39 percent of the additional revenues would come from charges on coal.
  - 30 percent from natural gas.
  - 31 percent from diesel and other oil products.
- Carbon prices of $25 and $50 per tonne would raise revenues of 0.9 and 1.3 of GDP in 2030 respectively.
- Notes: Calculations account for erosion of revenue from pre-existing fuel taxes.

### Health, domestic co-benefits, and net costs (2030)
- Cumulated over 2021–30, a carbon price rising progressively to $75 per tonne by 2030 would save a projected 11,000 premature fatalities from local air pollution exposure.
  - 71 percent of the avoided deaths are people over the age of 65 years.
  - 79 percent of the avoided deaths are in urban areas.
- Projected annualized abatement (mitigation) costs from a $75 carbon price are 0.3 percent of GDP in 2030.
- Domestic environmental co-benefits amount to 0.4 percent of GDP in 2030, implying a slight net economic gain.
  - 50 percent of the domestic environmental co-benefits reflect fewer local air pollution deaths.
  - 50 percent reflect reductions in other domestic environmental externalities including traffic congestion and accidents.
- Global climate benefits are equivalent to 0.6 percent of GDP (global climate benefits parameter: $185 per tonne CO2 reduced from Rennert and others (2022)).

### Competitiveness, CBAM, and EITE industries
- Production cost impacts for EITE industries from a $75 carbon price in 2030:
  - Example: production costs for steel and aluminium in Türkiye would increase by 10 and 20 percent respectively (accounting for direct and indirect charges).
  - Production cost increases in China would be more than twice as large for these industries.
- EU CBAM context:
  - The EU CBAM will phase in from 2026 onwards, charging for carbon content of steel, aluminum, cement, fertilizers, and electricity imported into the EU.
  - The EU CBAM charge per tonne of CO2 will likely be aligned with the EU ETS allowance price—currently equivalent to $70 per tonne.
  - With the exception of electricity, payments under the EU BCA (in the absence of carbon pricing in Türkiye) would amount to a relatively modest 0.02-0.06 percent of GDP under country-specific factors and 0.1-0.03 under domestic emissions factors.
  - Electricity sector payments would be even lower.
- CBAM design recommendations:
  - Limit CBAM to EITE industries to focus on vulnerable sectors and contain administrative costs.
  - Rebates for exporters should be based on industry (rather than firm-level) emission rates to avoid undermining mitigation incentives.
  - Ideally embodied carbon for imports would be based on country-specific emission rates, with pragmatic initial use of domestic industry emissions rates to avoid undue burdens on developing trading partners.
  - CBAMs should be adjusted where emissions in the trading partner are subject to pricing.

### Enhancing acceptability — household impacts and revenue recycling
- Assessment method:
  - Two-step approach: (i) input-output table to calculate effects on consumer goods (adjusted for future energy efficiency); (ii) map price increases to household budget shares using a household expenditure survey (2018) with behavioral adjustments.
- Distributional impacts before recycling (2030):
  - Prior to recycling, a $75 carbon price in 2030 imposes a projected average burden of 3 percent of consumption for the average household.
  - For the average household, direct effect (higher prices for electricity, natural gas, and transport fuels) accounts for about one-third of the burden; indirect effect (higher prices for fuels and electricity used by firms passed into consumer goods) about two-thirds.
- Distributional impacts after revenue recycling (2030) — illustrative scenario:
  - Revenue use: 25 percent targeted, unconditional cash transfer aimed at the bottom four consumption deciles; 75 percent for raising the basic income tax threshold (reducing labor taxes).
  - Assumed targeting parameters: coverage rate 90 percent; leakage rate 10 percent.
  - On net, the average household is better off by 0.4 percent of consumption after recycling.
  - Bottom four deciles: net benefits amounting to about 3-5 percent of consumption.
  - Next three deciles: approximately no better or worse off.
  - Wealthier households: worse off on net by a modest 1.4 percent of consumption.
- Trade-offs:
  - Using revenues to cut labor taxes boosts the economy by strengthening incentives for labor force participation and discouraging informality and tax-sheltering; lump-sum transfers forgo these beneficial effects.

### Enhancing acceptability — firm impacts and policy tools
- Firm cost components under carbon pricing:
  - Direct charge or allowance purchase for emissions firms continue to emit.
  - Indirect charge for carbon embodied in inputs, especially electricity.
  - Abatement costs for adopting cleaner but costlier technologies and fuels.
- At modest abatement levels, direct and indirect charges are expected to be much higher than abatement costs; this may reverse at deeper decarbonization.
- Policy tools to address competitiveness and acceptability:
  - CBAMs targeting EITE industries with simple design and industry-benchmarked rebates.
  - Feebates or sectoral regulations to reinforce mitigation incentives.
  - Measures to address industrial competitiveness and to recycle revenues for equity and economic efficiency.

*Source: IMF staff using CPAT; IMF Working Papers — Climate Mitigation Policy in Türkiye, wpiea2023108-print-pdf.*

### 49.      Other measures for addressing competitiveness are simpler administratively and are less

### wpiea2023108-print-pdf - 49.      Other measures for addressing competitiveness are simpler administratively and are less

### Other measures for addressing competitiveness
- Simpler administratively and less vulnerable to legal challenge, though to varying degrees:
  - Less robust instrument.
  - Reduce mitigation incentives for domestic EITE industries.
  - Lose revenue.
- Examples of other measures:
  - Exemptions from pricing for EITE industries.
  - Tradable emission rate standard (or feebate) for industry instead of pricing—or equivalently, rebating revenues from carbon pricing in output-based subsidies.
  - Free allowance allocations under an ETS.
- Common use: Canada, EU, South Africa.
- Limitations:
  - Do not compensate firms for abatement costs and become less robust at addressing competitiveness for deeper levels of decarbonization.
  - May limit mitigation incentives for EITE industries—especially exemptions; tradable emission rate standards (or equivalent measures) forgo opportunities to reduce emissions through lower production levels.
  - All three approaches forgo potential revenue from charges on EITE emissions.
- Note: From a competitiveness perspective while scaling up global mitigation action, the most effective approach would be a (pragmatically and equitably designed) international price coordination mechanism (see e.g., Parry and others 2021).

### Table 3 summary (comparing instruments to address competitiveness)
- Metrics compared: Protecting Competitiveness of EITE Industries; Revenue Implications; Administrative Burden; Limiting Leakage; Mitigation Incentives for Domestic EITE Industries; Risk of Legal Challenge Under WTO; Other design-dependent notes.
- CBAMs:
  - Protecting Competitiveness of EITE Industries: Yes (compensates for abatement costs).
  - Revenue Implications: Preserves carbon pricing revenue.
  - Administrative Burden: Significant if coverage beyond EITE products.
  - Limiting Leakage: Depends on design features.
  - Mitigation Incentives for Domestic EITE Industries: Promotes all incentives.
- Exemptions for EITE Industry Emissions From Pricing:
  - Protecting Competitiveness of EITE Industries: Full exemption is less effective (if it does not apply to indirect emissions).
  - Revenue Implications: Forgoes revenue.
  - Administrative Burden: N/A.
  - Limiting Leakage: N/A.
  - Mitigation Incentives for Domestic EITE Industries: Removes mitigation incentives for direct emissions.
  - Risk of Legal Challenge Under WTO: Could be challenged as subsidy but has not been.
- Tradable Emission Rate Standard/Output-based Rebate for EITE Industries:
  - Protecting Competitiveness of EITE Industries: Partial (does not compensate for abatement costs).
  - Revenue Implications: Forgoes revenue.
  - Administrative Burden: Partially.
  - Limiting Leakage: Partially.
  - Mitigation Incentives for Domestic EITE Industries: Reduces emissions per unit of production but not production levels.
- Free Allowances Under ETS:
  - Protecting Competitiveness of EITE Industries: Partial (does not compensate for abatement costs).
  - Revenue Implications: Forgoes revenue.
  - Administrative Burden: Partially.
  - Limiting Leakage: Partially.
  - Mitigation Incentives for Domestic EITE Industries: Promotes all incentives.

### Reinforcing sectoral policies: general points
- Carbon pricing needs reinforcement by other, less efficient but likely more acceptable, sectoral measures.
  - Reinforcing measures are less efficient because they do not promote the full range of behavioral responses that pricing instruments do.
  - Motivation: may avoid political difficulties associated with significant increases in energy prices and resulting burdens on households and firms.
- Focus on revenue-neutral feebates as fiscal analogues to tradable emission rate regulations:
  - Feebates: sliding scale of fees on products/activities with above average emission rates and rebates for below average emission rates.
  - Advantages of feebates:
    - More flexible and cost effective than emission rate regulations.
    - Automatically promote efficiency without need for trading.
    - Can be implemented quickly with minimal administrative cost in sectors with existing tax collection capacity (e.g., transportation).
  - Feebates could be applied by the finance ministry and build off monitoring procedures (e.g., if Türkiye moves ahead with an ETS).

### A. Power generation: findings and options
- Electricity demand expectation: "expected to grow at about 3-4 percent annually."
- 2019 generation shares:
  - Coal: 33 percent
  - Gas: 17 percent
  - Hydro: 26 percent
  - Wind: 6 percent
  - Solar: 3 percent
  - Geothermal: 3 percent
  - Decentralized renewables: 12 percent
- Reasons to expand renewables:
  - Levelized costs of renewables have fallen substantially.
    - Between 2010 and 2021: global weighted average levelized costs of utility scale solar PV declined by 88 percent; onshore wind, concentrating solar, and offshore wind declined by 60-68 percent.
  - Reducing coal generation is critical for addressing CO2, local air pollution emissions, and water stress.
- Türkiye target: renewable generation share of 73 percent in 2030.
  - Note: As of 2021, renewable energy shares in generation in G20 countries varied between 2 percent (Saudi Arabia) and 83 percent (Brazil) and averaged 27 percent.
- Current policy instruments: feed-in-tariff (FIT), net metering, tendering.
  - FIT introduced in 2007 and extended in 2021.
  - Tendering introduced in 2016; recent auction prices show renewables are highly competitive relative to fossil fuels and nuclear.
  - Limitations vs carbon pricing:
    - Provide same reward for shifting from coal to renewables as for shifting from gas to renewables, despite different emissions reductions.
    - Do not pass through charges on remaining emissions into electricity prices, hence weaker impact on reducing electricity use in industry and buildings.
- Under a progressively rising carbon price to $75 per tonne:
  - Projected renewable generation share rises to 67 in 2030.
  - Coal and gas generation shares would fall to 10 and 23 respectively.
  - Potential for stranded assets for coal and gas.
- Feebate option for power sector if carbon pricing constrained:
  - Feebates promote behavioral responses similar to carbon pricing (shifting from coal to gas and to renewables/nuclear, improving production efficiency) and are cost-effective.
  - Feebates have a much weaker impact on electricity prices than carbon pricing.
  - Feebate fee formula for a generator: CO2 price × [CO2/kWh ─ pivot point CO2/kWh] × electricity generation.
  - Revenue neutrality achievable if pivot point reflects recent industry average emission rates.
  - Capacity requirements: monitoring CO2 emission rates for power generators and applying fees/rebates.
- Illustration at current emission rates with price US$75 per tonne:
  - Feebate would apply fees equivalent to 2.8 cents per kWh for coal.
  - Subsidies of 6 and 2 cents per kWh for renewables and natural gas generation respectively.
  - Fees increase and subsidies for renewables decline as pivot point emission rate is updated over time.

### B. Industry: findings and feebate application
- EITE industries account for most industrial CO2 emissions in Türkiye.
- Türkiye target: reduce energy intensity of each industry at least 10 percent between 2011 and 2023.
- Feebates for EITE industries:
  - Firm fee formula: [CO2 price] × [CO2/output ─ industry-wide average CO2/output] × [firm output].
  - Applies to emissions from fuel combustion and process emissions.
  - Avoids a first-order tax burden on the average producer (average firm pays no charge on remaining emissions).
  - Helps alleviate competitiveness concerns compared with charging firms for remaining emissions.
  - If an ETS is implemented, feebates could build off monitoring procedures for industrial firm emissions.
- Box 1 illustrative impacts (exact figures preserved):
  - Steel:
    - Traditional integrated process produces about two tonnes of CO2 per tonne of steel.
    - Alternatives produce about 0.3–0.4 tonnes per tonne of steel.
    - A carbon price of $75 per tonne of CO2:
      - Would increase the cost of integrated production by about $150 per tonne of steel (about 30 percent of recent steel prices).
      - Would increase the cost under alternative technologies by about $30 per tonne of steel.
    - Under a feebate (assumed industry pivot point of 1 tonne CO2 per tonne steel):
      - Cost for integrated production would increase $75 per tonne of output.
      - Alternative technologies would receive a subsidy of about $45 per tonne of output.
  - Cement:
    - Traditional production produces about 1 tonne of CO2 per one tonne of cement; process emissions about 70 percent.
    - Post- and oxy-combustion reduce emissions about 55 and 85 percent respectively, while increasing capital costs by about 25 and 100 percent respectively.
    - A carbon price of $75 per tonne of CO2:
      - Would increase the cost of traditional production about $75 per tonne of cement, or about 60 percent.
      - Would increase the price of more efficient and CCUS-fitted plants by $45, and $12–35 per tonne of output respectively.
    - Under a feebate with price $75 per tonne of CO2:
      - Traditional production cost would increase by $7 per tonne of cement.
      - Subsidies to more efficient and CCUS-fitted plants of $15 and $27–47 per tonne of output.

### C. Transportation: findings and feebate application
- Türkiye does not have emissions rate targets for new vehicles, but has EV penetration targets.
  - Türkiye aims to have 1 million EVs on the road by 2030.
  - EVs were less than 1 percent of new vehicle sales in 2020 in Türkiye.
  - By comparison: 10-25 percent in some European countries; 52 and 75 percent in Iceland and Norway respectively; about 5 percent globally.
- Current tax treatment:
  - SCT rates for passenger cars with conventional engines: 45 to 220 percent, according to engine capacity and SCT base.
  - EVs SCT rates: 10 to 60 percent, according to electric motor power and tax brackets.
  - Hybrid vehicles with engine volume between 1,600 and 2,500 cm3 taxed more advantageously than conventional vehicles in same category.
  - Annual ownership taxes are lower for older cars, incentivizing delayed retirement.
  - Türkiye has no policies to promote low emission heavy-duty vehicles.
- Challenges:
  - Carbon pricing or higher fuel taxes have only a relatively modest impact on retail fuel prices and are unpopular; additional instruments needed to decarbonize road transportation.
- Feebate integrated into vehicle registration tax system:
  - Feebate fee formula for each new vehicle: CO2 price × [CO2/km ─ CO2/km of the new vehicle fleet] × [average lifetime vehicle km].
  - Advantages:
    - Promotes full range of behavioral responses for reducing emission rates (continuous reward for switching to lower emission rate vehicles).
    - Cost effective: reward proportional to reduction in emission rate.
    - Maintains approximate revenue neutrality as fees offset rebates when average emission rate is updated over time.

*IMF Working Paper: Climate Mitigation Policy in Türkiye — extracted content unit as provided.*

### 64.      For illustration, a feebate with a price of $600 per tonne of CO

### IMF WORKING PAPERS Climate Mitigation Policy in Türkiye

### Vehicles and Feebate Illustration
- A feebate with a price of $600 per tonne of CO2 would:
  - provide a subsidy of $7,000 for zero emission vehicles;
  - apply a tax of $5,000 to a vehicle with 200 grams CO2/km.
- Figure notes: Feebate assumes a fleet average emission rate of 120 grams CO2/km.
- Subsidies for zero emission vehicles would decline over time as the average fleet emission rate declines.

### Buildings: Opportunities, Market Failures, and Feebates
- Türkiye committed to Zero Carbon Buildings for All with targets:
  - decarbonize all new buildings by 2030;
  - decarbonize all existing buildings by 2050.
- Opportunities for reducing fuel and electricity use in buildings include:
  - Retrofitting of existing buildings (e.g., insulation upgrades);
  - Installing solar panels;
  - Switching to cleaner and more efficient heating equipment, including electric heating;
  - Deploying energy-efficient lighting and appliances;
  - Digitalization to “smart” homes (such as optimal automatic adjustment of heating temperatures).
- Short-term initiatives exist, but Türkiye does not have a long-term energy retrofitting strategy for existing buildings.
- Market failures that can hinder renovation rates:
  - Landlords lack incentives when savings accrue to tenants and cannot charge higher rent;
  - Renters lack incentives for short tenancy or apartment residence;
  - Households may lack upfront funds for major investments;
  - Uncertainty about energy savings, future energy prices, and contractor quality.
- Feebate scheme for appliances (example formula):
  - CO2 price × CO2 per unit of energy × [energy consumption per unit ─ industry-wide energy consumption per unit] × number of units.
  - For refrigerators: energy consumption rate = kWh per cubic foot cooled; number of units = cubic feet.
- Feebates could be applied to oil and gas-based heating systems (tax) and electric heat pumps (subsidy) to accelerate transition to zero-carbon heating.
- Feebate systems linked to building energy performance could be integrated into property taxes.

### Extractives: Methane and Pricing Options
- Methane emissions from extractive industries in Türkiye:
  - Two-thirds from coal mines;
  - One third from gas/oil operations.
- Mitigation possibilities: capture at mine mouth/wellhead for power generation, compress/liquify for sale, flaring, and improved maintenance of gas infrastructure.
- Illustration: An emissions tax of $70 per tonne CO2 equivalent on fugitive emissions would apply charges equivalent (prior to mitigation) of:
  - approximately $1.5 per barrel of oil;
  - $0.25 per thousand cubic feet of natural gas.
- Administrative approaches for methane taxes:
  - Firms meter emissions and remit taxes; subject to random/periodic inspections (Norway prototype).
  - Or proxy emissions taxes based on observable outputs/inputs and default emissions factors, with rebates for lower measured emissions.
- Default emissions factors could be based on zero mitigation scenarios or worst performing firms.

### Agriculture: Emissions and Pricing Options
- Agricultural GHG composition in 2020:
  - Methane from livestock operations accounted for about half percent of Türkiye’s agricultural GHGs in 2020;
  - Nitrous oxide emissions from soils accounted for another 45 percent.
- Türkiye currently lacks concrete targets or policies for reducing agricultural GHG emissions.
- Mitigation channels:
  - Reducing livestock herds (particularly beef and dairy cattle);
  - Increasing livestock productivity (e.g., breed switching);
  - Shifting to alternative feed (e.g., seaweed additive);
  - Reducing crops for human and animal consumption and reducing chemical fertilizers.
- Pricing and policy design considerations:
  - Proxy-based pricing using farm-level data and default emissions factors is possible given impracticality of direct farm monitoring.
  - Political opposition and carbon leakage risks may require compensation schemes for the farm sector.
  - Feebate approach could be based on GHG equivalent emission rates per hectare or nutritional value, with potential disaggregation (higher pivot points for beef producers, lower for crop producers).
  - Alternatively, combine emissions fees with revenue-recycled rebates proportional to value of farm output.
  - Household-level demand responses could be promoted through taxes on meat and dairy products.

### Forestry: LULUCF, Feebates, and Monitoring
- LULUCF sector has been a net sink for Türkiye since 2008.
- Türkiye aims to cover 30 percent of its land with forests by 2023 (current coverage is 29 percent).
- Policies to increase carbon storage nationwide include:
  - Reducing deforestation;
  - Afforestation;
  - Enhancing forest management (planting larger trees, fertilizing, tree thinning, increasing rotation lengths).
- National feebate program design (landowner-focused):
  - Fee = [CO2 rental price] × [carbon storage on their land in a baseline period ─ stored carbon in the current period].
  - Periods could be averages over multiple years to account for lumpy harvesting.
  - Feebates can be scaled to be revenue-neutral in expected terms.
  - Administration could be by the Ministry of Finance using the landowner registry for business tax collection.
- Rental payments recommended over one-off upfront payments:
  - Rental payment = carbon price × interest rate × number of years in a period.
  - Carbon price needs to rise over time to provide ongoing incentives.
  - Partial exemptions may be warranted for timber harvested for wood products due to delayed emissions release.
- Monitoring advances:
  - Forest carbon inventories use satellite monitoring, aerial photography, and on-the-ground sampling.
  - Low-level aerial photography (e.g., Light Detection and Ranging) can estimate wood volume cheaply; ground sampling still needed depending on forest density.
  - Measuring above ground carbon only (about three quarters of total) could reduce costs.

### Waste and Methane
- Türkiye launched the Zero Waste Project in 2017 and has the National Waste Management and Action Plan for 2016-2023.
- Zero Waste goals: prevent generation of waste, reduce waste, sort at source, recycle, recover, convert waste into energy, or send to landfills.
- Behavioral responses to reduce methane from waste:
  - At landfills: collection and flaring of methane leaks;
  - Consumer/industrial level: reduce demand for packaging and food, enhance recycling, compost organic waste.
- Pricing methane from waste is less compelling:
  - Limited number of readily observable mitigation responses—regulation can mimic tax effects;
  - Downstream methane taxes would not reduce waste supply; fiscal or regulatory incentives needed at household and industrial levels.

### Fuel Taxes and Sectoral Excise Observations
- Implicit carbon pricing from fuel excises in Türkiye is large for gasoline but not for other sector fuels.
- Diesel fuel is taxed at 1/3 of the rate for gasoline despite CO2 emissions per liter being 16 percent higher than gasoline.
- Because of the tax differential, diesel vehicles are about half of new car sales.
- Natural gas residential subsidy is equivalent to a negative CO2 price of $133 per tonne.
- IMF staff calculation: a tax on coal use in power generation and industry would have about 70 percent of the carbon mitigation effectiveness as an equivalently scaled carbon price on all fossil fuels.

### Summary of Key Policy Recommendations
- Define a GHG emissions target of around 290-300 million tonnes for 2030 in line with Türkiye’s net zero target for 2053.
- Implement a comprehensive carbon price (carbon tax or ETS) rising progressively to $75 per tonne by 2030.
- Use revenues from the carbon price for reductions in labor income taxes and targeted support to low-income households (after recycling the average household is better off by 0.4 percent).
- Consider a border carbon adjustment to preserve competitiveness of energy-intensive, trade-exposed industries.
- Consider feebates to reinforce mitigation incentives in the power and industry sectors without a significant tax burden on the average firm.
- Integrate a feebate into the vehicle registration tax system to promote adoption of clean vehicles.
- Consider feebates to promote adoption of energy efficient appliances and, through integration into property taxes, energy-saving building renovations.
- Consider proxy emissions pricing schemes for the extractive and agricultural sectors and a feebate for the forestry sector.

*IMF WORKING PAPERS — Climate Mitigation Policy in Türkiye*

### Annex A. The IMF-WB Climate Policy

### Annex A. The IMF-WB Climate Policy Assessment Tool (CPAT)

### Overview and core mechanics
- CPAT is a climate mitigation policy modelling platform developed jointly by the IMF and World Bank, covering over 200 countries and projecting fuel use and CO2 emissions for the four major energy sectors—power, industry, transport, and buildings.
- Baseline (BAU) projections start from recently observed fossil fuel and other fuel use by sector and project forward using:
  - GDP projections;
  - Assumptions about the income elasticity of demand and the price responsiveness of fuel use in different sectors;
  - Assumptions about the rate of technological change that affects energy efficiency and the productivity of different energy sources;
  - Future international energy prices.
- In projections, current carbon pricing, non-pricing policies, and fuel taxes are held fixed in real terms at their 2021 levels or stringency.
- The impact of carbon pricing on fuel use and emissions depends on:
  - (i) the proportionate impact on future fuel prices; and
  - (ii) the price responsiveness of fuel use in different sectors.
- Pass-through of carbon charges into fuel user prices is taken to be 100 percent for the most part (fuel supply curves are perfectly elastic), with country exceptions where pass through is estimated at 0.25, 0.5, or 0.75 for SOE or regulated pricing cases.

### Sectoral modeling details
- Power sector:
  - Results averaged over two models:
    - A simplified model of fuel generation choices parametrized to match fuel price responsiveness of more complex models.
    - A technology-explicit, hybrid economic-engineering model where forward-looking agents choose dispatch and investment to minimize levelized costs (capital, operational, fuel).
  - Carbon prices reduce dispatch from fossil-fuel plants and shift investment toward renewables; investment shifts are subject to constraints including a maximum annual scale-up of renewables.
  - Model accounts for inertia in decision making and distribution of costs within generation sources, producing gradual switching between sources and accelerated retirement of older coal plants.
  - District heating is included in this sector.
- Industry sector:
  - Disaggregated into eight industries (e.g., iron and steel, machinery, cement).
  - Carbon pricing reduces emissions intensity (adoption of cleaner or more energy-efficient technologies) and reduces production levels via higher consumer prices.
- Transport sector:
  - Fuel consumption from gasoline and diesel vehicles declines as higher prices induce switching to more fuel-efficient vehicles and reductions in vehicle miles travelled.
  - Railways, domestic aviation, and domestic shipping modelled equivalently.
  - Dynamic capital-turnover model for light-duty vehicles distinguishes ICEVs and EVs in vehicle stock; fleet turnover rate is 6.7 percent a year (based on an assumed 15-year life).
- Buildings sector:
  - Demand decomposed into energy and CO2 intensity changes (insulation upgrades, shifting to electric heating, energy-efficient appliances) and behavioral changes (economizing on lighting and heating).
  - Commercial and residential buildings stocks replaced annually at 1.8 percent and 1.2 percent respectively (based on assumed building lives of 55 and 85 years).
  - Initial split of electricity use and direct CO2 emissions from commercial and residential buildings from UNFCCC data (available for Annex 1 countries; non-Annex 1 split based on simple average of Annex 1 G20 countries).
  - CO2 and electricity intensity of new buildings initially assumed to be 30 percent of that of existing stock; new building policies typically reduce that difference (usually to 0 percent by 2030).

### Data sources, parameters, and calibration
- CPAT populated using energy consumption data by country and sector compiled from the International Energy Agency (IEA) and other sources (latest data is for 2019).
- GDP projections are from the latest IMF forecasts; projections extrapolated beyond five years assuming GDP growth rates in the last year persist till 2030, assuming gradual convergence among developing countries.
- Data on energy taxes, subsidies, and prices compiled from publicly available and IMF and World Bank sources, with inputs from proprietary and third-party sources.
- International coal, oil, and natural gas prices projected using an average of IEA (rising) and IMF (flat) price projections as of mid-2021.
- Fuel and electricity price responsiveness parameterized broadly consistent with empirical evidence and energy models; fuel and electricity price elasticities over the longer term are generally between -0.5 and -0.8.
- Carbon emissions factors by fuel product from IIASA (2021); emissions in 2019 calibrated to match those implied by UNFCCC GHG and emissions in 2020-1 calibrated to match EC-JRC (Crippa and others 2018), Global Carbon Budget (Friedlingstein and others 2021), and various sources.
- CPAT converts mitigation pledges into absolute emissions targets for 2030 to compare pledged ambition with model BAU emissions projections; pledged proportionate reductions in CO2 emissions below BAU are assumed equal to those for total GHGs.

### Behavioral responses and policy instrument effects (from Annex B)
- Comprehensive carbon pricing promotes:
  - Power: shifting investment and dispatch from coal to natural gas, renewables, perhaps nuclear and fossil generation with carbon capture and storage;
  - Industry: reducing CO2 and electricity intensity and output levels;
  - Transportation: shifting to more efficient ICEVs, to EVs (or other zero-emission vehicles), and reducing vehicle miles travelled;
  - Buildings: reducing CO2 intensity, electricity intensity, and energy demand via efficiency upgrades, insulation, switching to electric heat pumps, appliance efficiency, behavioral changes.
- Non-pricing instruments tend to promote narrower or lagged responses:
  - Renewable portfolio standards and feed-in tariffs promote only shifting from fossil to renewable generation;
  - Emission rate regulations or feebates for new vehicles reduce on-road fleet emissions gradually as fleet turns over and do not reduce vehicle miles travelled; EV subsidies do not promote switching to more efficient ICEVs;
  - Incentives for net zero new buildings reduce emissions from the building stock very gradually (typically less than 2 percent of building stock replaced each year).
- Combining non-pricing measures across sectors and capital vintages can broaden responses, but cost-effectiveness under regulatory approaches requires extensive credit trading markets.
- Policy design trade-off: carbon pricing is most efficient but politically challenging due to energy price impacts; non-pricing instruments are less efficient but often more politically acceptable and can kick-start decarbonization in hard-to-abate sectors like transportation and buildings.

### Limitations, caveats, and model scope
- Fuel price responses become very uncertain for large policy changes that may drive non-linear technology adoption (e.g., CCS and direct air capture).
- Fuel price responsiveness is assumed approximately similar across countries though actual responsiveness may differ with energy system structure and regulations.
- CPAT implicitly accounts for general equilibrium effects such as modest feedback on energy demand from policy-induced GDP changes but does not explicitly account for international feedback effects (changes in trade patterns) and changes in international fuel prices resulting from simultaneous reforms in large countries.
- Model is parameterized to produce emissions projections and fuel-use price responsiveness broadly consistent with more detailed energy and computable general equilibrium models.
- Cost estimates cited for CCS and direct air capture in the literature are noted as highly speculative (examples given: $75 and $175 per ton of CO2 reduced, respectively).

*Annex A. The IMF-WB Climate Policy Assessment Tool (CPAT) — IMF Working Papers*

### References

### References

### Climate mitigation policy analyses and working papers
- Arregui, Nicolas and Ian Parry, 2020. “Reconsidering Climate Mitigation Policy in the UK.” Working paper No. 20-268, International Monetary Fund, Washington DC.
- Black, Simon, Koralai Kirabaeva, Ian Parry, Mehdi Raissi, and Karlygash Zhunussova, 2021a. “A Comprehensive Climate Mitigation Strategy for Mexico.” Working paper No. 21-246, International Monetary Fund, Washington DC.
- Black, Simon, Ruo Chen, Aiko Mineshima, Victor Mylonas, Ian Parry, and Dinar Prihardini, 2021b. “Scaling up Climate Mitigation Policy in Germany.” Working paper No. 21-241, International Monetary Fund, Washington, DC.
- Black, Simon, Jean Chateau, Florence Jaumotte, Ian Parry, Gregor Schwerhoff, Sneha Thube, and Karlygash Zhunussova, 2022a. “Getting on Track to Net Zero: Accelerating a Global Just Transition in This Decade.” IMF Staff Climate Note No 2022/010, Washington, DC.
- Black, Simon, Danielle Minnett, Ian Parry, James Roaf, and Karlygash Zhunussova, 2022b. “A Framework for Comparing Climate Mitigation Policies Across Countries.” Working Paper No. 2022/254, International Monetary Fund, Washington, DC.
- Black, Simon, Ian Parry, and Karlygash Zhunussova, 2022c. “Carbon Taxes or Emissions Trading Systems? Instrument Choice and Design.” IMF Staff Climate Note, Washington, DC.
- Parry, Ian, 2020. “The Rationale for, and Design of, Forest Carbon Feebates.” In Designing Fiscal Instruments for Sustainable Forests, World Bank Group, Washington DC: 137-158.
- Parry, Ian, 2021. “Implementing the Domestic and International Climate Mitigation Goals of the US Administration: A Comprehensive Fiscal Policy Approach.” Working paper No. 21-57, International Monetary Fund, Washington DC.
- Parry, Ian, Simon Black, and James Roaf. 2021. A Proposal for an International Carbon Price Floor. IMF Staff Climate Note. IMF, Washington, DC.
- Parry, Ian, Simon Black, and Karlygash Zhunussova, 2022a. “Carbon Taxes or Emissions Trading Systems? Instrument Choice and Design.” IMF Staff Climate Note. IMF, Washington, DC.
- Parry, Ian, Simon Black, Danielle Minnett, Victor Mylonas, and Nate Vernon, 2022b. “How to Cut Methane Emissions”. IMF Staff Climate Note. IMF, Washington, DC., forthcoming.
- Keen, Michael, Ian Parry, and James Roaf, 2021. “Border Carbon Adjustments: Rationale, Design and Impact.” IMF Working Paper 2021/239, International Monetary Fund, Washington, DC.
- Timilsina, Govinda; Dissou, Yazid; Toman, Mike; Heine, Dirk. 2021. Carbon Tax in an Economy with Informality : A Computable General Equilibrium Analysis for Cote d’Ivoire. Policy Research Working Paper; No. 9710. © World Bank, Washington, DC.

### Empirical studies on pollution, productivity, and social cost of carbon
- Chang, Tom, Joshua Graff Zivin, Tal Gross, and Matthew Neidell. 2016. "Particulate Pollution and the Productivity of Pear Packers." American Economic Journal: Economic Policy, 8 (3): 141-69.
- Chang, Tom Y., Joshua Graff Zivin, Tal Gross, and Matthew Neidell. "The effect of pollution on worker productivity: evidence from call center workers in China." American Economic Journal: Applied Economics 11, no. 1 (2019): 151-72.
- Fu, Shine, V Brian Viard, Peng Zhang, Air Pollution and Manufacturing Firm Productivity: Nationwide Estimates for China, The Economic Journal, Volume 131, Issue 640, November 2021, Pages 3241–3273, https://doi.org/10.1093/ej/ueab033
- Zivin, Graff, Joshua, and Matthew Neidell. 2012. "The Impact of Pollution on Worker Productivity." American Economic Review, 102 (7): 3652-73.
- Rennert, Kevin, Frank Errickson, Brian Prest, and others, 2022. “Comprehensive Evidence Implies a Higher Social Cost of CO2”. Nature. https://doi.org/10.1038/s41586-022-05224-9.

### Energy, emissions datasets, and modeling resources
- Crippa, Monica, Diego Guizzardi, Marilena Muntean, Edwin Schaaf, Frank Dentener, John A. van Aardenne, Suvi Monni, et al. 2018. “Gridded Emissions of Air Pollutants for the Period 1970–2012 within EDGAR v4.3.2.” Earth System Science Data 10 (4): 1987–2013.
- Friedlingstein, Pierre, Matthew W. Jones, Michael O’Sullivan, Robbie M. Andrew, Dorothee C. E. Bakker, Judith Hauck, Corinne Le Quéré, et al. 2021. “Global Carbon Budget 2021.” Earth System Science Data Discussions, November, 1–191.
- IEA, 2021a. World Energy Statistics and Balances (database). International Energy Agency, Paris, France. Available at: https://doi.org/10.1787/data-00512-en
- IEA, 2021b. Global EU Outlook 2021. International Energy Agency, Paris, France. Available at: https://www.iea.org/reports/global-ev-outlook-2021
- IEA, 2022. Global Methane Tracker. International Energy Agency, Paris, France. Available at: www.iea.org/reports/methane-tracker.
- IIASA, 2021. The GAINS model. The International Institute for Applied Systems Analysis. Available at: https://previous.iiasa.ac.at/web/home/research/researchPrograms/air/GAINS.html
- OECD, 2020. Trade in embodied CO2 (TeCO2) Dataset. Available from the IMF’s Climate Change Dashboard: https://climatedata.imf.org/pages/re-indicators#re3
- WRI, 2021. Climate Watch. World Resources Institute, Washington, DC. Available at: www.climatewatchdata.org
- UNFCCC, 2022. Greenhouse Gas Inventory Data. United Nations Framework Convention on Climate Change, Bonn, Germany. Available at: https://di.unfccc.int/detailed_data_by_party.
- Turkish Statistical Institute, 2022. “Greenhouse Gas Emissions By Sector”. Available from https://data.tuik.gov.tr/Kategori/GetKategori?p=cevre-ve-enerji-103&dil=2

### Country- and sector-specific energy and climate studies for Türkiye
- Erdin, C., & Ozkaya, G., 2019. Türkiye’s 2023 energy strategies and investment opportunities for renewable energy sources: Site selection based on ELECTRE. Sustainability (Switzerland), 11(7).
- GOT, 2019. On bi̇ri̇nci̇ kalkinma plani (2019-2023) (11th Development Plan (2019-2023)). Government of Türkiye. Available at: www.sbb.gov.tr/wp-content/uploads/2019/07/OnbirinciKalkinmaPlani.pdf.
- Kilickaplan, Anil, Dmitrii Bogdanov, Onur Peker, Upeksha Caldera, Arman Aghahosseini, and Christian Breyer. 2017. “An Energy Transition Pathway for Turkey to Achieve 100% Renewable Energy Powered Electricity, Desalination and Non-Energetic Industrial Gas Demand Sectors by 2050.” Solar Energy 158 (December): 218–35. https://doi.org/10.1016/j.solener.2017.09.030.
- Republic of Türkiye Ministry of Energy and Natural Resources, 2019. Türkiye Energy Strategy 2019-2023. Available at: https://enerjiapi.etkb.gov.tr//Media/Dizin/SGB/Stratejik_Plan/2019-2023_Stratejik_Planı.pdf.
- Uyduranoglu, Ayse, and Serda Selin Ozturk. 2020. “Public Support for Carbon Taxation in Turkey: Drivers and Barriers.” Climate Policy 20 (9): 1175–91. https://doi.org/10.1080/14693062.2020.1816887.
- WBG, 2022a. Unlocking Green Finance in Turkey. World Bank Group, Washington, DC.
- WBG, 2022b. State and Trends of Carbon pricing. World Bank Group, Washington, DC.
- WBG, 2022c. Fiscal policies for Development and Climate Action: Tax and Expenditure Climate Change Assessment. World Bank Group, Washington, DC.

### Policy design, instruments, and implementation guidance
- Batini, Nicoletta and Philippe Pointereau, 2021. “Greening Food Supply in Advanced Economies” in The Economics of Sustainable Food: Smart Policies for Health and the Planet, Batini, Nicoletta (ed.). Island Press and International Monetary Fund.
- Borenstein, Severin, and Ryan Kellogg. Carbon Pricing, Clean Electricity Standards, and Clean Electricity Subsidies on the Path to Zero Emissions. No. w30263. National Bureau of Economic Research, 2022.
- Cosbey, A., S. Droege, C. Fischer, and C. Munnings. 2019. “Developing guidance for implementing border carbon adjustments: Lessons, cautions, and research needs from the literature.” Review of Environmental Economics and Policy 13: 3–22.
- Flachsland, Christian, Michael Pahle, Dallas Burtraw, Ottmar Edenhofer, Milan Elkerbout, Carolyn Fischer, Oliver Tietjen, and Lars Zetterberg. 2018. “Five Myths About a European Union Emissions Trading System Carbon Price Floor.” Resources for the Future, Washington, DC.
- Sedjo, R., and G. Marland, 2003, “Inter-Trading Permanent Emissions Credits and Rented Temporary Carbon Emissions Offsets: Some Issues and Alternatives.” Climate Policy 3: 435–444.
- Sijm, J., Y. Chen, and B. F. Hobbs, 2012. “The Impact of Power Market Structure on the Pass-Through of CO2 Emissions Trading Costs to Electricity Prices – A Theoretical Approach”. Energy Economics 34: 1143–1152.
- Parry, Ian, Dirk Heine, Shanjun Li, and Eliza Lis, 2014. Getting Energy Prices Right: From Principle to Practice. International Monetary Fund, Washington, DC.
- Cosbey, A., S. Droege, C. Fischer, and C. Munnings. 2019. “Developing guidance for implementing border carbon adjustments: Lessons, cautions, and research needs from the literature.” Review of Environmental Economics and Policy 13: 3–22.

*Climate Mitigation Policy in Türkiye Working Paper No. WP/23/108*

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_Source: https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023108-print-pdf.pdf_