## wpiea2024155-print-pdf ## Source details **Canonical URL:** [wpiea2024155-print-pdf](https://www.imf.org/-/media/files/publications/wp/2024/english/wpiea2024155-print-pdf.pdf) ## Other formats - [Markdown version](/-/media/files/publications/wp/2024/english/wpiea2024155-print-pdf.pdf.md) - [Structured JSON version](/-/media/files/publications/wp/2024/english/wpiea2024155-print-pdf.pdf.json) --- ### Climate context and Asia-Pacific role - Temperatures are rising around the globe causing increased frequency and severity of weather-related natural disasters (Alonso and others, 2021). - By mid-century, rising waters combined with migration to low-lying areas and coastal cities will impact nearly a billion people in the Asia-Pacific region and coastal megacities run the risk of being submerged (Neumann and others, 2015). - For small Pacific Island countries, rising sea levels pose an existential threat. - The region currently produces about half of the world’s carbon dioxide (CO2) emissions and contains five of the ten largest greenhouse-gas-emitting countries (Alonso and others, 2021). - Asian countries have a pivotal role in achieving the 25 or 50 percent reduction in global greenhouse gases (GHGs) below recent levels needed by 2030 to get on track with limiting global warming to 2 or 1.5°C, while maintaining the principle of common but differentiated responsibilities (Black and others 2023). ### Policy response overview and paper scope - Asia-Pacific countries are increasingly implementing policies to support climate change mitigation, including carbon pricing and non-pricing schemes. - Carbon pricing is potentially the most effective mitigation instrument but has larger impacts on energy prices and thus larger burdens on various groups, requiring policymakers to balance pricing with less efficient but more politically acceptable instruments. - Coordinated global solutions, possibly including concessional finance and technology transfer to developing countries, will be important to ensure a just, equitable, and orderly transition. - The paper: - Discusses main opportunities and behavioral responses for reducing emissions and commonly used mitigation instruments. - Considers key design issues for carbon pricing, with a focus on emissions trading schemes (ETS). - Describes measures to overcome obstacles to carbon pricing. - Discusses experiences with carbon pricing in other countries. - Covers complementary policy reforms: reinforcing mitigation instruments, public investment, fuel tax reform, green industrial policies, and supporting reforms to the energy sector. - Asia-Pacific experiences highlighted: ETSs exist in China, Korea, and New Zealand; under consideration or recently implemented in India, Indonesia, Thailand, and Vietnam; Singapore has implemented a carbon tax. ### Mitigation basics: opportunities and behavioral responses - Four classes of responses for reducing GHG emissions: - Fuel/input switching: power generation Coal→gas; fossil fuels→nuclear, wind, solar, hydro, other renewables; transport Gasoline/diesel→electric; buildings Gas/oil heating/cooking→electric. - Energy/production efficiency: Heat optimization; More efficient heating/cooling, lighting, and appliances; shifting to more productive livestock herds; Low→high fuel economy vehicles. - Emissions capture: CCS; forest carbon sequestration through afforestation, reduced deforestation and enhanced forest management; collecting methane leaks at fuel extraction sites and landfills. - Demand responses: reducing driving, heating, meat consumption (Mission LiFE in India as an example). ### Classification of commonly used mitigation instruments - Instruments described: - Carbon tax: charge on the carbon content of fossil fuel supply or emissions; tax rate typically ramps up progressively. - ETS: firms required to hold allowances for emissions; government caps total allowances and scales back cap over time; allowance prices determined in trading markets. - Feebate: sliding scale of fees for products/activities above pivot emission rate and rebates below pivot. - Performance standard: requires firms to meet emission rate or energy efficiency standard; credit trading allows shortfalls to be offset by credits. - Clean technology subsidy: subsidy or tax credit for adopting clean technology or fuel. - Clean technology mandate: specifies minimum requirements for adoption or use of clean technology. - Energy taxes: increasing existing (or imposing new) taxes on fossil fuel products or electricity. - Classification axes: pricing versus non-pricing; fiscal versus regulatory. - Relative merits: - Carbon pricing is potentially the most effective mitigation instrument if comprehensively applied, promoting a full range of behavioral responses and mobilizing revenues. - Feebates and tradable performance standards can cost-effectively promote emissions-intensity reductions within sectors but do not promote demand responses and do not raise revenue. - Clean technology subsidies and mandates promote a narrower range of responses and do not encourage all possible fuel or technology switches. ### Key design issues for ETSs - Administration and Coverage - Typical downstream application to large emitting firms in power and industrial sectors: firms submit annual emissions reports, verified by accredited third parties, and acquire allowances to cover emissions; cap fixed by the government. - Allowance distribution options: free allocation, auctioning, or combination. - Implementation considerations: penalties sufficient to deter non-compliance; regulatory and legislative processes needed for rule changes. - Advantages of downstream focus: extends pre-existing local pollution regulations; addresses process emissions and CCS adoption. - Drawbacks of downstream focus: new monitoring capacity required; market supervision needed; small emitter exemptions reduce administrative burden but exclude many firms. - Alternative points of regulation: midstream application to fuel suppliers simplifies emissions inference; upstream application to methane from extractives duplicates fiscal regime administration; agricultural sector pricing currently impractical. - Addressing Price Volatility - ETSs fix emissions (cap) but allow allowance price to vary; carbon taxes fix prices but allow emissions to vary. - Price uncertainty can deter private innovation and adoption of high upfront cost, long-life clean technologies. - Mechanisms to limit allowance price volatility: - Price floor (e.g., minimum auction price) reduces supply when binding and tends to raise government revenues. - Price ceiling (trigger level) increases supply when binding and limits revenues. - ETSs have shown significant price volatility historically. - Compatibility with Overlapping Instruments - Overlapping instruments (clean tech and energy efficiency policies) can reduce allowance prices but not emissions under a fixed cap. - Options: implement a price floor so overlapping instruments cause allowances to be removed from the system; tighten future ETS caps to account for overlapping instruments. - ETS can act as a backstop to ensure absolute emissions outcomes when primary policy is regulatory or fiscal. - Allowance Allocations - Allocation options: - Free allocation: compensates firms but forgoes revenue and can create windfall profits. - Auctioning—revenue to general government: revenues can assist low-income households or fund productive purposes. - Auctioning—earmarking: revenues earmarked for climate investments but may be less efficient and do not address competitiveness concerns. ### Addressing obstacles to pricing - Assisting Households - Initial burden before revenue recycling consists of abatement costs and charges on unabated emissions. - Burden mainly borne by households via higher prices for energy products and consumer goods; some burden may reduce labor and capital income. - Two broad policy approaches: - Implement revenue-raising carbon pricing and recycle revenues to address poverty and fairness. - Rely on non-pricing instruments that have smaller impacts on consumer prices but do not raise revenues. - Possible revenue-funded measures: - Partially targeted income support: challenges include incomplete social safety net coverage and leakage to non-poor; payroll tax rebates or investments for Sustainable Development Goals improve efficiency but may not reach informal-sector poor. - Targeted energy price support: rebates on energy bills for low-income households compensate at modest fiscal cost but can suppress energy demand reductions. - Block tariffs for electricity: practical if metered; significant leakage to higher-income households possible. - Broad-based energy price support: larger fiscal cost and larger suppression of demand reductions than targeted rebates but administratively realistic. - Industrial Competitiveness - EITE industries account for over 80 percent of industrial emissions in China, India, and Korea. - Carbon pricing increases industrial production costs per unit through abatement costs, charges on unabated emissions, and higher electricity input costs. - Approaches without international coordination: - Not raising net revenues from EITE sectors: free allowances, recycling revenues within sector (output-based rebates), or feebates/performance standards. - Border carbon adjustments (BCAs)/carbon border adjustment mechanisms (CBAMs): charges on embodied carbon in imports and possible rebates for exports. - International policy coordination could price emissions both domestically and in trading partners more comprehensively. - Assisting Workers and Regions - Many economies rely heavily on coal: - India: Ministry of Power announced it will not close any coal-fired plants before 2030 and will invest in an additional 75-80 GW of coal-fired power plants this decade. - China: almost 70 percent of power is generated from coal; substantial construction of new coal-fired capacity has continued and accelerated since 2021. - Transition assistance measures: - Reclaiming abandoned mining/drilling sites; temporary budget support for local governments; geographically targeted investments, subsidies, or grants. - In China, efforts to pair coal power plants with renewable power plants to mitigate local community impacts. - Measures for displaced workers: extended unemployment benefits, training and reemployment services, financial assistance for job search, relocation, and health care; outreach and tailored training; wage insurance or tax credits for older workers. - Fiscal and employment considerations: - Cost of comprehensive benefits for displaced workers is generally a small fraction of potential carbon pricing revenues. - Coal-related job losses are small in macro terms and tend to be offset over time by expanding clean energy sector jobs. - Support for carbon pricing in Asia-Pacific could increase if revenue recycling targeted toward renewable projects and green technology development (Dabla-Norris and others, 2023b). ### Experience with ETSs and carbon pricing to date in Asia-Pacific and global overview - Carbon pricing schemes have proliferated, doubling coverage of global GHG emissions since 2015. - As of end 2023: - 73 carbon pricing schemes operating in 47 countries, covering 25 percent of global GHGs. - This includes 30 carbon taxes and nine ETSs implemented at the national level; the EU ETS prices emissions in EU and European Free Trade Association countries. - National coverage of emissions varies from below 30 percent in some cases to more than 70 percent in others (examples: Canada, Germany, Korea, Sweden). - Carbon prices vary from below $5 to over $100 per tonne (mostly in European countries). - The average (emissions weighted) price of covered emissions has grown from $7 in 2015 to about $22. - Global carbon pricing overview: - Current global average emissions price (including uncovered emissions): $5 per tonne. - Fuel excises can provide similar incentives as carbon pricing; they have been modestly declining at the global level. ### Box 1 — Emissions pricing schemes in selected Asian countries (key facts and figures) - China - Launched nationwide intensity-based ETS in January 2021. - Covers around 40 percent of nationwide CO2 emissions. - Currently covers coal and gas-fired power plants and has no cap on total emissions. - Allowances allocated freely according to production levels and predetermined emissions intensity benchmarks. - Trading prices since late 2013 are around US $14 per tonne. - Government intends to extend emissions trading to industry including petrochemicals, chemicals, building materials, iron and steel, non-ferrous metals, paper, and domestic aviation. - Indonesia - Introduction of a carbon tax mandated through Law No. 7/2021 on Tax Harmonization at the end of 2021 but yet to be implemented. - Initial carbon tax level would start at around US $2 per tonne of CO2. - On February 22, 2023, Ministry of Energy and Mineral Resources announced the launch of a mandatory ETS for the power sector, with gradual expansion from on-grid coal-fired power plants (on-grid facilities with capacity of more than 100 megawatts) from 2023 onwards to oil and gas-fired power plants and off-grid coal-fired power plants in following years. - Specific design to be determined in implementing guidelines and likely combined with the carbon tax and carbon offset mechanisms. - Korea - Launched first national ETS in East Asia in 2015. - Phase 3 (2021-2025) applies to 684 companies—principally power generators and large industrial firms—covering three quarters of national GHGs (slightly up from a coverage rate of 70 percent in Phase 2 (2018-2020)). - Phase 2 cap cumulated over three years was 1,796 MtCO2e, or on average 599 MtCO2e a year. - In Phase 3 the annual average emissions cap will be reduced 4.7 percent relative to 2017-2019 ETS emissions. - Allowances largely given away for free (based on companies’ 2011-2013 emissions); 10 percent will be auctioned in Phase 3 with revenues earmarked for environmental investments. - EITE industries will continue to receive 100 percent free allowance allocations. - Emissions prices have remained around $20 per tonne. - Singapore - Introduced a carbon tax on January 1, 2019, applying downstream to all facilities in power and industry sectors with annual direct emissions exceeding 25 kilotons of CO2 equivalent—these sources account for 80 percent of economywide GHGs. - For the first five years the tax rate was set at US$4 (S$5) per tonne. - Following a review in 2022 the tax rate has increased to US $19 (S $25) per tonne in 2024 and will rise to US$33 (S$45) per tonne in 2026 and 2027, reaching US$60-100 37-59 (S $50-80) per tonne by 2030. - Early announcement of future rates intended to provide business certainty. - Existing facilities in EITE sectors will receive transitory allowances; revenues fund climate initiatives like energy efficiency improvements for industry. - Starting from 2024, companies will be able to surrender high quality international carbon credits to offset up to 5 percent of their taxable emissions. - Japan - Implemented Tax for Climate Change Mitigation in 2012 legislating a carbon tax at the rate of US $2.7 (JPY 289) per tonne of CO2 equivalent applied to all fossil fuels on top of existing petroleum and coal tax. - Estimated tax revenue was US $1.5 billion (JPY 234 billion) per year. - The tax was designed to reduce GHGs 80 percent by 2050, but the rate has remained too low to reach the country’s target. - Government committed to expanding carbon pricing from current low levels beginning in fiscal year 2028. ### Lessons from international experiences (design considerations and observed outcomes) - Emissions measurement - Accurate projection of emissions is needed to set an appropriate ETS cap. - Example: EU ETS initial allocations based on inflated industry projections; CO2 prices crashed from around €20-30 per tonne after 2005 verifications showed actual emissions were significantly below the cap. - Price volatility - ETSs should provide a robust and predictable price signal to promote low-carbon investment. - EU ETS prices varied between €5 and €30 per tonne in its first 15 years due to oversupply and overlapping measures. - EU addressed volatility with the Market Stability Reserve (MSR); revisions allowing withdrawn allowances to be cancelled contributed to recent price increases. - California ETS includes a price floor with reserve price rising exogenously at 5 percent annually in real terms—this has enabled a tripling of prices to current levels of around $30 per tonne compared with 2012 prices. - Korea’s price floor is endogenous (based on recent historical prices) and allowances have yet to show a robust upward trajectory. - Use of emissions offsets - Caution advised: offsets can enable forgone domestic reductions and may not reduce total global emissions unless offsets are fully additional. - EU no longer allows firms covered by its ETS to purchase international offsets in lieu of surrendering allowances. - Limited demand and credibility concerns have kept offset prices highly depressed. - Coverage - Broad coverage is desirable if it does not prevent a robust emissions price. - New Zealand’s ETS includes energy and forestry but excludes agriculture; abundant low-cost afforestation projects have likely contributed to a lower ETS allowance price, with nearly all emissions reductions under the ETS coming from forestry rather than energy sector mitigation. - Inclusion of agricultural emissions pricing in New Zealand delayed to 2030 but remains a key priority. - Competitiveness - ETS design must address competitiveness concerns for industry and exporters. - EU is phasing in a BCA for exporters of steel, cement, fertilizer, aluminum, hydrogen and electricity generation to the EU to require buying allowances for embodied emissions; BCA will replace free allowances for EITE industries. - BCA will charge for a very small portion of nationwide emissions for exporters to the EU—1 percent in the case of China and India—and much of the burden will be passed forward to EU domestic consumers. - BCAs are contentious relative to the principle of common but differentiated responsibilities in the Paris Agreement. ### Complementary policies and sectoral instruments - Rationale: sectoral mitigation instruments complement carbon pricing where political acceptability of pricing is constrained and where sectors are hard-to-abate (buildings, transport). - Feebates and tradable performance standards (TPSs) - Feebates may have greater political acceptability than carbon pricing because they do not impose a new tax on the average household or firm. - Vehicle registration feebates imply implicit carbon prices in some European countries often around $600 per tonne or more, supporting rapid EV deployment in countries like Norway and the Netherlands. - TPSs apply to vehicle sellers in China, India, Korea, the US, and the EU (often alongside feebates). - Fuel tax reform - For countries with high shares of coal (example: China and India), a coal tax is relatively effective at cutting emissions because most of the emissions reduction—over 80 percent in the case of China, India, Indonesia, and Korea—under carbon pricing would come from reduced use of coal rather than reduced use of natural gas and oil. - Interaction with a pure ETS: an increased coal tax would be neutralized on emissions by the ETS cap unless the cap is adjusted to close the gap between an emissions target and the baseline with the coal tax increase. - Public investment - Private sector likely to fund most decarbonization investment; undersupplied network infrastructure may require public investment (hydrogen and CCS pipelines, high voltage transmission lines, EV charging stations). - Financing principles: reflect investment costs in higher prices for users; recover EV charging infrastructure costs through user charges rather than the general budget. - Industrial policy (IP) and green IP - IP: targeted measures to specific industries; green IP: IP aimed at climate mitigation or adaptation. - Design principles: well-targeted, time-bound, cost-effective, transparent; minimize rent seeking and corruption; avoid violating international commitments. - Additional green IP principles: complement core decarbonization policies; minimize adverse spillovers; ensure time-bound, cost-effective, and transparent support; operate within appropriate institutional frameworks; coordinate globally. - Risks: distort resource allocation; induce relocation of firms to countries with larger subsidies; vulnerability to rent seeking; large fiscal costs. - Country examples: China dominates production of critical low-carbon technology products; India’s support for green hydrogen highlighted as promising. - Power sector reform - Constraints limiting renewables adoption: limited installed renewable capacity, absence of markets for energy storage and grid services, substandard frequency control, insufficient reserve capacity, inadequate reactive power for voltage control. - In many emerging market economies in Asia, power demand grows with income and fossil fuel dependence is increasing. - Administered pricing, SOE distortions, and soft budget constraints undermine carbon price signals. - India specifics: DISCOMs underpriced electricity, inadequate subsidy payments, long-term purchase agreements, high technical and commercial losses; government initiatives include Revamped Distribution Sector Scheme and additional borrowing space of 0.5% of gross state domestic production for states undertaking power sector reforms. ### Conclusions — role of carbon pricing and complementary measures - Carbon pricing, if designed and implemented appropriately, can be the centerpiece of climate mitigation strategies for most countries. - Benefits of pricing: - Promotes a wide range of behavioral responses. - Mobilizes a valuable source of revenue. - Imposes generally manageable transitional costs that can be counteracted by revenue recycling and domestic environmental co-benefits. - Policy choices: - Carbon taxes are simpler administratively (extension of existing fuel taxes). - ETSs may be preferred for institutional reasons and can be designed (price floors, allowance auctions, midstream application to fuel suppliers) to mimic attractions of carbon taxes while simplifying administration. - Necessity of complementary measures: - Balance between pricing and reinforcing instruments like feebates. - Productive and equitable use of carbon pricing revenues. - Just transition measures for vulnerable groups. - Public investment in enabling infrastructure. - Extensive public communication and stakeholder consultation. - Global coordination: coordinated solutions, including concessional finance and technology transfer, will be needed to ensure the transition is just, equitable, and orderly. ### Annex highlights - Annex 1 — Least cost mitigation strategies - Marginal abatement cost (MAC) curves show incremental cost of reducing one extra tonne of emissions; upward sloping. - Least cost principle: cut economywide emissions across sectors until marginal abatement costs equalize. - Typical pattern: fuel/input switching largest within sectors; power generation accounts for largest share of reductions in coal-dominant countries. - Annex 2 — Illustrative impacts on industrial production costs (under $50 carbon price, 2022) - Steel (direct emissions only): in China and India, percentage cost increases about 15 percent for coal-based steel; CO2 factor for coal-based steel noted as 1.75 tonnes CO2 per tonne of steel; electric-based steel CO2 factor noted as 0.3 tonnes CO2 per tonne of steel. - Cement (direct emissions only): impacts on production costs much larger than for steel—about 50 percent increase in production costs relative to baseline prices in China and India; CO2 factor for cement noted as 0.8 tonnes CO2 per tonne of cement. - Annex 3 — Policies to Assist German Coal Miners and Communities - Table A1 summarizes measures to assist displaced coal workers and coal mining regions in Germany (source: Furnaro and others (2021)). *Source: wpiea2024155-print-pdf - Introduction (table of contents) and Introduction through Annex excerpts.* ### Introduction ........................................................................................................... ### wpiea2024155-print-pdf - Introduction ### Document structure and sections - Introduction ......................................................................................................................................................... 4 - Mitigation Basics: Mitigation Opportunities and Commonly Used Mitigation Instruments......................... 5 - Key Design Issues for ETSs ............................................................................................................................... 8 - Addressing Obstacles to Pricing ..................................................................................................................... 11 - Experience with ETSs and Carbon Pricing to Date in Asia-Pacific .............................................................. 15 - Complementary Policies .................................................................................................................................. 19 - Conclusions ....................................................................................................................................................... 24 ### Annexes and supplementary materials - Annex 1. Least Cost Mitigation Strategies ..................................................................................................... 25 - Annex 2. Illustrative Impacts on Industrial Production Cost from Mitigation Policies .............................. 26 - Annex 3. Policies to Assist German Coal Miners and Communities ........................................................... 27 - Annex 4. Further Details on Carbon Pricing Schemes .................................................................................. 28 - References ......................................................................................................................................................... 29 ### Publication identification - IMF WORKING PAPERS Policy Options for Climate Change Mitigation: ETSs in Asia-Pacific - INTERNATIONAL MONETARY FUND 4 *Source: wpiea2024155-print-pdf - Introduction (table of contents).* ### Introduction ### Introduction ### Climate context and Asia-Pacific role - Temperatures are rising around the globe causing increased frequency and severity of weather-related natural disasters (Alonso and others, 2021). - By mid-century, rising waters combined with migration to low-lying areas and coastal cities will impact nearly a billion people in the Asia-Pacific region and coastal megacities run the risk of being submerged (Neumann and others, 2015). - For small Pacific Island countries, rising sea levels pose an existential threat. - The region currently produces about half of the world’s carbon dioxide (CO2) emissions and contains five of the ten largest greenhouse-gas-emitting countries (Alonso and others, 2021). - Asian countries have a pivotal role in achieving the 25 or 50 percent reduction in global greenhouse gases (GHGs) below recent levels needed by 2030 to get on track with limiting global warming to 2 or 1.5°C, while maintaining the principle of common but differentiated responsibilities (Black and others 2023). ### Policy response overview - Asia-Pacific countries are increasingly implementing policies to support climate change mitigation, including carbon pricing and non-pricing schemes. - Carbon pricing is potentially the most effective mitigation instrument but has larger impacts on energy prices and thus larger burdens on various groups, requiring policymakers to balance pricing with less efficient but more politically acceptable instruments. - Coordinated global solutions, possibly including concessional finance and technology transfer to developing countries, will be important to ensure a just, equitable, and orderly transition. ### Paper scope - The paper: - Discusses main opportunities and behavioral responses for reducing emissions and commonly used mitigation instruments. - Considers key design issues for carbon pricing, with a focus on emissions trading schemes (ETS). - Describes measures to overcome obstacles to carbon pricing. - Discusses experiences with carbon pricing in other countries. - Covers complementary policy reforms: reinforcing mitigation instruments, public investment, fuel tax reform, green industrial policies, and supporting reforms to the energy sector. - Asia-Pacific experiences are highlighted: ETSs exist in China, Korea, and New Zealand; under consideration or recently implemented in India, Indonesia, Thailand, and Vietnam; Singapore has implemented a carbon tax. ### Mitigation basics: opportunities and behavioral responses - Four classes of responses for reducing GHG emissions: - Fuel/input switching: e.g., power generation Coal→gas; fossil fuels→nuclear, wind, solar, hydro, other renewables; transport Gasoline/diesel→electric; buildings Gas/oil heating/cooking→electric. - Energy/production efficiency: e.g., Heat optimization; More efficient heating/cooling, lighting, and appliances; shifting to more productive livestock herds; Low→high fuel economy vehicles. - Emissions capture: e.g., CCS; forest carbon sequestration through afforestation, reduced deforestation and enhanced forest management; collecting methane leaks at fuel extraction sites and landfills. - Demand responses: e.g., reducing driving, heating, meat consumption. The Mission LiFE in India is an example promoting sustainable living and demand response. ### Classification of commonly used mitigation instruments - Instruments summarized include: - Carbon tax: charge on the carbon content of fossil fuel supply or emissions; tax rate typically ramps up progressively. - ETS: firms required to hold allowances for emissions; government caps total allowances and scales back cap over time; allowance prices determined in trading markets. - Feebate: sliding scale of fees for products/activities above pivot emission rate and rebates below pivot. - Performance standard: requires firms to meet emission rate or energy efficiency standard; credit trading allows shortfalls to be offset by credits. - Clean technology subsidy: subsidy or tax credit for adopting clean technology or fuel. - Clean technology mandate: specifies minimum requirements for adoption or use of clean technology. - Energy taxes: increasing existing (or imposing new) taxes on fossil fuel products or electricity. - Classification axes: - Pricing versus non-pricing (prices unabated emissions or not). - Fiscal versus regulatory (specifying tax/subsidy rates vs. quantities, rates, or technologies). - Relative merits: - From a pure economics lens, carbon pricing is potentially the most effective mitigation instrument if comprehensively applied, promoting the full range of behavioral responses and mobilizing revenues. - Feebates and tradable performance standards can cost-effectively promote emissions-intensity reductions within sectors but do not promote demand responses and do not raise revenue. - Clean technology subsidies and mandates promote a narrower range of responses and do not encourage all possible fuel or technology switches. ### Key design issues for ETSs A. Administration and Coverage - Typical downstream application to large emitting firms in power and industrial sectors: firms submit annual emissions reports, verified by accredited third parties, and acquire allowances to cover emissions; cap fixed by the government. - Allowance distribution options: free allocation, auctioning, or combination. - Implementation considerations: - Penalties sufficient to deter non-compliance; risk that actual emissions exceed the cap. - Changes to ETS rules often require regulatory and legislative processes with notice and consultation. - Advantages of downstream focus: - Extends pre-existing local pollution regulations. - Addresses process emissions and CCS adoption (whereas carbon taxes on fuel supply may require supplementary schemes). - Drawbacks of downstream focus: - Monitoring emissions requires new capacity (continuous emissions monitoring systems or fuel-input monitoring with emissions factors). - Monitoring trading markets requires capacity to supervise allowance registries and market trading. - Small emitter exemptions reduce administrative burden but exclude many firms. - Alternative points of regulation: - Midstream application to fuel suppliers (standard for carbon taxes) simplifies emissions inference via emissions factors and is necessary to cover transport and building fuels but may duplicate road fuel excise collection. - Upstream application to methane from extractives requires self-reporting and duplicates fiscal regime administration. - Agricultural sector pricing is currently impractical due to poor monitoring and large informal sector presence. B. Addressing Price Volatility - ETSs fix emissions (cap) but allow allowance price to vary with market conditions; carbon taxes fix prices but allow emissions to vary. - Price uncertainty can deter private innovation and adoption of high upfront cost, long-life clean technologies. - Mechanisms to limit allowance price volatility: - Price floor (e.g., minimum auction price) reduces supply when binding and tends to raise government revenues. - Price ceiling (trigger level) increases supply when binding and limits revenues. - ETSs have shown significant price volatility historically (Figure 1 shows nominal price, US$/tonne CO2, for California, EU, Korea, 2005–2022). C. Compatibility with Overlapping Instruments - Overlapping instruments (clean tech and energy efficiency policies) can reduce allowance prices but not emissions under a fixed cap. - Options to maintain compatibility: - Implement a price floor so that where it binds, overlapping instruments cause allowances to be removed from the system, lowering emissions. - Tighten future ETS caps to account for overlapping instruments. - Role of ETS as backstop: - ETS can ensure emissions reductions are achieved when primary policy is regulatory or fiscal (example: California’s multiple regulatory measures with ETS ensuring absolute emissions outcomes). - From an economic efficiency perspective, ETS should play the central role with complementary regulations in hard-to-abate sectors (transport and buildings). D. Allowance Allocations - Three main allocation options (see Table 3 summary in source): - Free allocation: allowances given free based on formulas linked to past emissions or production; helps compensate firms for higher production costs and competitiveness concerns but forgoes revenue and can create windfall profits, worsening distributional outcomes. - Auctioning—revenue to general government: government collects revenues which can assist low-income households or fund productive general purposes (cutting distortionary taxes, public investments for Sustainable Development Goals); revenues can also compensate firms but that diverts funds from general budget. - Auctioning—earmarking: revenues earmarked for climate investments (e.g., grid upgrades) but may be less efficient and do not address competitiveness concerns. ### Addressing obstacles to pricing A. Assisting Households - Initial burden before revenue recycling consists of: - Abatement costs (induced reduction in emissions). - Charges on unabated emissions (taxes, allowance purchase costs, or foregone revenue under free allocation). - Burden mainly borne by households via higher prices for energy products and consumer goods; some burden may reduce labor and capital income. - Two broad policy approaches: - Implement revenue-raising carbon pricing and recycle revenues to address poverty and fairness. - Rely on non-pricing instruments that have smaller impacts on consumer prices but do not raise revenues. - Possible revenue-funded measures: - Partially targeted income support: challenges include incomplete social safety net coverage and leakage to non-poor; payroll tax rebates or investments for Sustainable Development Goals improve efficiency but may not reach informal-sector poor. - Targeted energy price support: rebates on energy bills for low-income households compensate for higher energy prices at modest fiscal cost, but may not cover non-energy consumer price increases and can suppress energy demand reductions; administrative challenges exist. - Block tariffs for electricity: practical if metered; significant leakage to higher-income households possible. - Broad-based energy price support (e.g., subsidies for distribution companies): larger fiscal cost and larger suppression of demand reductions than targeted rebates but more administratively realistic. B. Industrial Competitiveness - Focus on energy-intensive, trade-exposed (EITE) industries: they account for over 80 percent of industrial emissions in China, India, and Korea. - Carbon pricing increases industrial production costs per unit through: - Abatement costs. - Charges on unabated emissions (direct emissions times emissions price). - Higher electricity input costs (emissions embodied in electricity inputs times emissions price). - Approaches without international coordination: - Not raising net revenues from EITE sectors: free allowances, recycling revenues within sector (output-based rebates), or feebates/performance standards; these are administratively manageable but divert revenues and may be less robust at deep decarbonization. - Border carbon adjustments (BCAs)/carbon border adjustment mechanisms (CBAMs): charges on embodied carbon in imports and possible rebates for exports. - International policy coordination could price emissions both domestically and in trading partners more comprehensively. C. Assisting Workers and Regions in Asia-Pacific Countries - Many economies rely heavily on coal: - India: Ministry of Power announced it will not close any coal-fired plants before 2030 and will invest in an additional 75-80 GW of coal-fired power plants this decade. - China: almost 70 percent of power is generated from coal; substantial construction of new coal-fired capacity has continued and accelerated since 2021. - Carbon lock-in from coal complicates transition to renewables and long-term climate objectives. - Transition assistance measures: - Reclaiming abandoned mining/drilling sites; temporary budget support for local governments to create employment and bridge transition. - Geographically targeted investments, subsidies, or grants to individuals/firms in affected regions. - In China, efforts to pair coal power plants with renewable power plants to mitigate local community impacts. - Measures for displaced workers: extended unemployment benefits, training and reemployment services, financial assistance for job search, relocation, and health care; outreach and tailored training; wage insurance or tax credits for older workers. - Fiscal and employment considerations: - Cost of comprehensive benefits for displaced workers is generally a small fraction of potential carbon pricing revenues. - Coal-related job losses are small in macro terms and tend to be offset over time by expanding clean energy sector jobs. - Support for carbon pricing in Asia-Pacific could increase if revenue recycling targeted toward renewable projects and green technology development (Dabla-Norris and others, 2023b). ### Experience with ETSs and carbon pricing to date in Asia-Pacific - Carbon pricing schemes have proliferated, doubling coverage of global GHG emissions since 2015. - As of end 2023: - 73 carbon pricing schemes operating in 47 countries, covering 25 percent of global GHGs. - This includes 30 carbon taxes and nine ETSs implemented at the national level; the EU ETS prices emissions in EU and European Free Trade Association countries. - National coverage of emissions varies from below 30 percent in some cases to more than 70 percent in others (examples: Canada, Germany, Korea, Sweden). - Carbon prices vary from below $5 to over $100 per tonne (mostly in European countries). - The average (emissions weighted) price of covered emissions has grown from $7 in 2015 to about $22 (end of sentence in source truncated). *Source: wpiea2024155-print-pdf - Introduction* ### 2023. Carbon prices differ across jurisdiction due to the policy environment and anticipated changes in ### wpiea2024155-print-pdf - 2023. Carbon prices differ across jurisdiction due to the policy environment and anticipated changes in ### Global carbon pricing overview - Current global average emissions price (including uncovered emissions): $5 per tonne. - Fuel excises can provide similar incentives as carbon pricing; they have been modestly declining at the global level. - Current global average is described as "a small fraction of the increase in carbon pricing or emissions-equivalent measures by 2030 even for a 2°C target." ### Carbon pricing schemes and trajectories (high-level) - Carbon prices differ across jurisdictions because of: - the policy environment and anticipated changes in policy (including changes in the floor price, more ambitious climate targets, and tightened ETS rules), - speculative investment, - broader economic trends including commodity prices (World Bank, 2022). - Coverage and intensity targets vary by scheme; pricing schemes under consideration in Philippines, Vietnam, and India. ### Box 1 — Emissions pricing schemes in selected Asian countries (key facts and figures) - China - Launched nationwide intensity-based ETS in January 2021. - Covers around 40 percent of nationwide CO2 emissions. - Currently covers coal and gas-fired power plants and has no cap on total emissions. - Allowances allocated freely according to production levels and predetermined emissions intensity benchmarks. - Trading prices since late 2013 are around US $14 per tonne. - Government intends to extend emissions trading to industry including petrochemicals, chemicals, building materials, iron and steel, non-ferrous metals, paper, and domestic aviation. - Indonesia - Introduction of a carbon tax mandated through Law No. 7/2021 on Tax Harmonization at the end of 2021 but yet to be implemented. - Initial carbon tax level would start at around US $2 per tonne of CO2. - On February 22, 2023, Ministry of Energy and Mineral Resources announced the launch of a mandatory ETS for the power sector, with gradual expansion from on-grid coal-fired power plants (on-grid facilities with capacity of more than 100 megawatts) from 2023 onwards to oil and gas-fired power plants and off-grid coal-fired power plants in following years. - Specific design to be determined in implementing guidelines and likely combined with the carbon tax and carbon offset mechanisms. - Korea - Launched first national ETS in East Asia in 2015. - Phase 3 (2021-2025) applies to 684 companies—principally power generators and large industrial firms—covering three quarters of national GHGs (slightly up from a coverage rate of 70 percent in Phase 2 (2018-2020)). - Phase 2 cap cumulated over three years was 1,796 MtCO2e, or on average 599 MtCO2e a year. - In Phase 3 the annual average emissions cap will be reduced 4.7 percent relative to 2017-2019 ETS emissions. - Allowances largely given away for free (based on companies’ 2011-2013 emissions); 10 percent will be auctioned in Phase 3 with revenues earmarked for environmental investments. - EITE industries will continue to receive 100 percent free allowance allocations. - Emissions prices have remained around $20 per tonne. - Singapore - Introduced a carbon tax on January 1, 2019, applying downstream to all facilities in power and industry sectors with annual direct emissions exceeding 25 kilotons of CO2 equivalent—these sources account for 80 percent of economywide GHGs. - For the first five years the tax rate was set at US$4 (S$5) per tonne. - Following a review in 2022 the tax rate has increased to US $19 (S $25) per tonne in 2024 and will rise to US$33 (S$45) per tonne in 2026 and 2027, reaching US$60-100 37-59 (S $50-80) per tonne by 2030. - Early announcement of future rates intended to provide business certainty. - Existing facilities in EITE sectors will receive transitory allowances; revenues fund climate initiatives like energy efficiency improvements for industry. - Starting from 2024, companies will be able to surrender high quality international carbon credits to offset up to 5 percent of their taxable emissions. - Japan - Implemented Tax for Climate Change Mitigation in 2012 legislating a carbon tax at the rate of US $2.7 (JPY 289) per tonne of CO2 equivalent applied to all fossil fuels on top of existing petroleum and coal tax. - Estimated tax revenue was US $1.5 billion (JPY 234 billion) per year. - The tax was designed to reduce GHGs 80 percent by 2050, but the rate has remained too low to reach the country’s target. - Government committed to expanding carbon pricing from current low levels beginning in fiscal year 2028. ### Lessons from international experiences (design considerations and observed outcomes) - Emissions measurement - Accurate projection of emissions is needed to set an appropriate ETS cap. - Example: EU ETS initial allocations based on inflated industry projections; CO2 prices crashed from around €20-30 per tonne after 2005 verifications showed actual emissions were significantly below the cap. - Price volatility - ETSs should provide a robust and predictable price signal to promote low-carbon investment. - EU ETS prices varied between €5 and €30 per tonne in its first 15 years due to oversupply and overlapping measures. - EU addressed volatility with the Market Stability Reserve (MSR); revisions allowing withdrawn allowances to be cancelled contributed to recent price increases. - California ETS includes a price floor with reserve price rising exogenously at 5 percent annually in real terms—this has enabled a tripling of prices to current levels of around $30 per tonne compared with 2012 prices. - Korea’s price floor is endogenous (based on recent historical prices) and allowances have yet to show a robust upward trajectory. - Use of emissions offsets - Caution advised: international or domestic offsets can enable forgone domestic reductions and may not reduce total global emissions unless offsets are fully additional. - EU no longer allows firms covered by its ETS to purchase international offsets in lieu of surrendering allowances. - Limited demand and credibility concerns have kept offset prices highly depressed. - Coverage - Broad coverage is desirable if it does not prevent a robust emissions price. - New Zealand’s ETS includes energy and forestry but excludes agriculture; abundant low-cost afforestation projects have likely contributed to a lower ETS allowance price, with nearly all emissions reductions under the ETS coming from forestry rather than energy sector mitigation. - Inclusion of agricultural emissions pricing in New Zealand delayed to 2030 but remains a key priority. - Competitiveness - ETS design must address competitiveness concerns (for industry and exporters). - EU is phasing in a BCA for exporters of steel, cement, fertilizer, aluminum, hydrogen and electricity generation to the EU to require buying allowances for embodied emissions; BCA will replace free allowances for EITE industries. - BCA will charge for a very small portion of nationwide emissions for exporters to the EU—1 percent in the case of China and India—and much of the burden will be passed forward to EU domestic consumers. - BCAs are contentious relative to the principle of common but differentiated responsibilities in the Paris Agreement. ### Complementary policies and sectoral instruments - Rationale - Sectoral mitigation instruments complement carbon pricing where political acceptability of pricing is constrained and where sectors are hard-to-abate (buildings, transport). - Sectoral instruments can promote a broad range of behavioral responses and technology shifts. - Feebates and tradable performance standards (TPSs) - Feebates may have greater political acceptability than carbon pricing because they do not impose a new tax on the average household or firm. - Vehicle registration systems have incorporated feebates: implicit carbon prices in feebates in some European countries are often around $600 per tonne or more, supporting rapid EV deployment in countries like Norway and the Netherlands. - Tradable performance standards (the regulatory analogue of feebates) apply to vehicle sellers in China, India, Korea, the US, and the EU (often alongside feebates). - Feebates and TPSs could apply to power generation or industrial sectors to reinforce or substitute for carbon pricing, though such applications have been less common. *Source: wpiea2024155-print-pdf - 2023. Carbon prices differ across jurisdiction due to the policy environment and anticipated changes in policy.* ### Box 2. Examples of Industrial Performance Standards and Feebates ### Box 2. Examples of Industrial Performance Standards and Feebates ### Industrial performance standards — examples and mechanics - Canada - Provinces and territories are required to have a carbon charging system with the carbon price ramping up from CAN$10 per tonne CO2 in 2019 to CAN$50 in 2023 and CAN$170 by 2030. - A federal carbon pricing backstop applies in provinces/territories that requested it or that do not meet the federal standard. - The backstop has two components: - (i) a fuel charge; and - (ii) a tradable performance standard for facilities in EITE industries (with annual emissions exceeding 50 kilo tonnes of CO2 equivalent), known as the Output-Based Pricing System (OBPS). - The OBPS currently applies in Manitoba, Prince Edward Island, Yukon, Nunavut, and partially in Saskatchewan (Ontario and New Brunswick recently transitioned from the OBPS to regional versions). - The OBPS sets an annual emissions-intensity standard for each facility based on (70 percent of) the production-weighted average emissions intensity of all large emitting facilities producing similar products across Canada. - Compliance mechanics: - Facilities exceeding the standard are subject to fees on their excess emissions (in line with federal pricing). - Facilities emitting less than their standard earn credits they can sell or bank for future use. - Netherlands - In January 2021, Netherlands introduced a levy on industrial CO2 emissions equal to any positive difference between an escalating target price (rising to €125 per tonne by 2030) and the prevailing EU ETS price. - The levy applies to emissions over and above a pivot point emission rate based on the cleanest ten percent of firms in the industry at the EU-level. - Companies with emission rates below the pivot point can sell credits to other firms where the levy is binding. ### Feebates and vehicle taxation (figure note) - Feebates assume on-road fleet average emission rate of 115 g CO2/km. - Circulation taxes for Germany are expressed on a lifetime basis assuming a 13-year life and 7 percent discount rate. ### Fuel tax reform — rationale and interactions with ETS - For countries with high shares of coal in the energy mix (example countries: China and India), a coal tax is relatively effective at cutting emissions because most of the emissions reduction—over 80 percent in the case of China, India, Indonesia, and Korea—under carbon pricing would come from reduced use of coal rather than reduced use of natural gas and oil. - Coal taxes are administratively straightforward, for example, if levied at the mine mouth and with rebates for coal exports and taxes on coal imports. - China and India already collect specific coal taxes at the mine mouth. - Interaction with ETS: - If a coal tax is increased in the presence of a pure ETS, its effects on emissions would be neutralized as emissions are set by the emissions cap. - The effect of a coal tax increase on baseline emissions can be considered and the ETS cap can then be set to close the gap between an emissions target and emissions in the baseline with the coal tax increase. ### Public investment — role and financing principles - Private sector will likely fund most decarbonization investment (renewable power generation, electrified industrial processes, household purchases of EVs, heat pumps, energy-efficient lighting/appliances). - Undersupplied network infrastructure that may require public investment includes: - pipelines for hydrogen and carbon capture and storage, - high voltage transmission lines to link renewable plants, - EV charging stations. - Current patterns: - In many middle and low-income countries, public investment in clean energy extends beyond infrastructure networks because power sector and certain industries are often dominated by state-ownership and electricity prices are regulated. - The public share in clean energy investment might fall if energy markets are liberalized over time. - Financing principles: - More efficient to reflect investment costs in higher prices for users (for example, higher electricity tariffs) rather than subsidize investments from public budgets. - Recover investment costs for EV charging infrastructure through charges for using the facilities rather than the general budget. - Public sector outlays for the building sector (for example, subsidies for adoption of heat pumps) could be financed within the sector (for example, through higher taxes for residential gas) to avoid subsidizing housing on net relative to other sectors. ### Industrial policy (IP) and green industrial policy (green IP) - Definitions and justification - IP: government efforts to shape the economy through targeted measures to specific domestic industries, firms, or economic activity. - Green IP: IP aimed at climate change mitigation or adaptation. - IP may be justified in presence of well-identified externalities, coordination failures, or public input under-provision. - Design principles for effective IP measures: - Well-targeted, time-bound, cost-effective, transparent, and deliver on objectives while preserving macroeconomic, fiscal, and external sustainability. - Mitigate incentives for rent seeking and corruption. - Avoid measures that violate international commitments or harm trading partners. - Additional principles specific to green IP: I. Complement core decarbonization policies through policies that accelerate the adoption, innovation, and production of low-carbon technologies. II. Minimize adverse spillovers, avoid creating technology transfer barriers, especially to developing countries, and avoid inconsistencies with WTO obligations. III. Ensure support is time-bound, cost-effective, and transparent, while limiting fiscal burdens, other domestic costs, and negative effects on international markets. IV. Conduct policies within an appropriate institutional framework to minimize implementation risks. V. Coordinate globally on green IP measures. - Risks associated with green IP: - Distort resource allocation (for example, discriminatory provisions against foreign manufacturers akin to import restrictions). - Induce relocation of green energy companies to countries with larger tax incentives and subsidies, yielding negative cross-border spillovers and inefficient allocation. - Vulnerability to rent seeking and corruption; potential wasted resources, competitiveness losses, or state capture. - Political risk: large fiscal cost could lead to rejection by voters complicating international coordination. - Fiscal cost relative to carbon pricing which generates fiscal revenues; offsetting via higher taxes elsewhere can exacerbate pre-existing tax distortions and increase efficiency costs of mitigation. - Implementation guidance: - Evaluate expected net benefits through cost-benefit analysis capturing direct and indirect costs and benefits, including fiscal and administrative costs and indirect costs from resource misallocation. - Urgent need for policies (including IP) that spur, scale up, and adopt green technologies across sectors. - Country examples and considerations: - China accounts for the bulk of production of critical low-carbon technology products (solar panels, batteries) alongside extraction of rare earth metals, making market entry difficult for many countries. - India’s support for the green hydrogen industry is highlighted as a potentially promising example complementary to development and poverty reduction goals. - OECD guidance for green hydrogen IP: specifically support R&D, ensure sufficient supply of renewable energy, establish clear carbon price trajectories, reduce investor uncertainty through regulatory action, and consider blue hydrogen as an interim solution. ### Power sector reform — constraints and reform priorities - Constraints that limit renewable adoption and effective carbon pricing: - Limited installed renewable capacity or limited ability to integrate additional renewable capacity. - Absence of markets for energy storage and other grid support services. - Substandard frequency control, insufficient reserve capacity for fluctuations in renewable output, and inadequate reactive power for voltage control. - In many emerging market economies in Asia, power demand is growing with income, and dependence on fossil fuels for power generation is often increasing. - Administered pricing, power sector monopolies, and soft budget constraints on SOEs distort carbon price signals. - India case specifics: - Electricity distribution companies (DISCOMs) struggle to raise revenues amid underpriced electricity, inadequate subsidy payments, and long-term purchase agreements. - High energy losses (technical loss, theft, inefficiency in billing) and high commercial losses (default in payment, inefficiency in collection). - DISCOMs have under-invested in power distribution and upgrading infrastructure due to heavy financial losses. - Payment delays by DISCOMs to renewable generators act as a major barrier to scaling up renewable energy in India. - Government initiatives include the Ministry of Power’s Revamped Distribution Sector Scheme, additional borrowing space of 0.5% of gross state domestic production for states undertaking power sector reforms, and additional prudential norms for lending by Power Finance Corporation Limited. - Outlook: - Reform schemes are critical as many distribution and transmission companies will likely face financial stability hits (from revenue loss), distribution system issues (reactive power, voltage impacts and reverse power flows), and demand forecast uncertainty as renewable energy ramps up. ### Conclusions — role of carbon pricing and complementary measures - Carbon pricing, if designed and implemented appropriately, can be the centerpiece of climate mitigation strategies for most countries. - Benefits of pricing: - Promotes a wide range of behavioral responses for reducing emissions. - Mobilizes a valuable source of revenue. - Imposes generally manageable transitional costs that can be counteracted by revenue recycling and significant domestic environmental co-benefits. - Policy choices: - Carbon taxes are simpler administratively (extension of existing fuel taxes). - Policymakers may prefer ETSs for institutional reasons (e.g., environmental ministry leadership) and because ETSs can be designed (price floors, allowance auctions, midstream application to fuel suppliers) to mimic some attractions of carbon taxes while simplifying administration. - Necessity of complementary measures: - Balance between pricing and reinforcing instruments like feebates. - Productive and equitable use of carbon pricing revenues. - Just transition measures for vulnerable groups. - Pricing of broader emissions sources. - Public investment in enabling infrastructure that the private sector may underinvest in. - Extensive public communication and stakeholder consultation. - Global coordination: - Coordinated solutions will be needed to ensure the climate transition is just, equitable and orderly, consistent with country-specific circumstances. - May include concessional and adequate finance along with technology transfer to developing countries. ### Annex 1. Least cost mitigation strategies — concepts - Marginal abatement cost (MAC) curves: - Show, for any level of emissions reductions, the incremental cost from reducing emissions by one extra tonne through pushing harder on behavioral responses. - Upward sloping because it becomes increasingly costly to cut emissions. - Least cost principle: - Cutting economywide emissions at least cost involves exploiting mitigation responses across all sectors up to the point where the cost of the last tonne reduced is equated across sectors. - Typical sectoral patterns: - Within a sector, fuel/input switching typically accounts for the largest share of emissions reductions. - For countries with significant coal use, across sectors, power generation accounts for the largest share of reductions, followed by industry. ### Annex 2. Illustrative impacts on industrial production costs (under $50 carbon price, 2022) - Steel (under $50 carbon price for 2022, direct emissions only) - In China and India, carbon pricing would cause absolute cost increases for coal-based steel production broadly similar to other countries given limited differences in emission rates per unit of production. - In percentage terms, cost increases are about 15 percent for China and India due to smaller baseline prices for steel in those countries. - Cost increases would be much smaller for electric-based steel (CO2 factor noted as 0.3 tonnes CO2 per tonne of steel) compared with coal-based steel (CO2 factor noted as 1.75 tonnes CO2 per tonne of steel); electric production is currently more prevalent in the US and Europe. - Cement (under $50 carbon price for 2022, direct emissions only) - Impacts on production costs for cement are much larger than for steel—about 50 percent increase in production costs relative to baseline prices in China and India. - Even though the CO2 emissions factor per ton of cement output is less than half of that per ton of coal-based steel output (CO2 factor for cement noted as 0.8 tonnes CO2 per tonne of cement), the proportionate production cost increases for cement are much higher due to much lower baseline prices per ton of output. *International Monetary Fund — Policy Options for Climate Change Mitigation: ETSs in Asia-Pacific (Box 2 excerpt).* ### Annex 3. Policies to Assist German Coal Miners ### Annex 3. Policies to Assist German Coal Miners and Communities ### Summary Overview - Table A1 provides a summary of measures to assist coal miners and mining communities in the transition away from coal in Germany. - Source for the table: Furnaro and others (2021). ### Focus of Measures - The table covers examples of ongoing measures to assist displaced coal workers and coal mining regions in Germany. - The content appears as part of the broader working paper: IMF WORKING PAPERS Policy Options for Climate Change Mitigation: ETSs in Asia-Pacific. *Source: Furnaro and others (2021). IMF WORKING PAPERS Policy Options for Climate Change Mitigation: ETSs in Asia-Pacific* --- _Source: https://www.imf.org/-/media/files/publications/wp/2024/english/wpiea2024155-print-pdf.pdf_