Fiscal Monitor, October 2019: How to Mitigate Climate Change
Fiscal Monitor, October 10, 2019
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- Fiscal Monitor, October 2019: How to Mitigate Climate Change
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Bibliographic details
- Published: October 10, 2019
- Series: Fiscal Monitor
- DOI: https://doi.org/10.5089/9781498321228.089
Case for Carbon Pricing
- Emphasizes the environmental, fiscal, economic, and administrative case for using carbon taxes, or similar pricing schemes such as emission trading systems, to implement climate mitigation strategies.
- Argues carbon pricing is central to mitigation policy given its ability to internalize greenhouse gas emissions costs.
Quantitative Framework and Application
- Provides a quantitative framework for understanding the effects and trade-offs of carbon pricing with other instruments.
- Applies this framework to the largest advanced and emerging economies.
Alternative and Complementary Instruments
- Identifies “feebates” as an alternative approach: impose fees on high polluters and give rebates to cleaner energy users.
- Notes feebates can play an important role when higher energy prices are difficult politically.
- Discusses supporting measures to promote clean technology investments.
International Arrangements
- Calls for a carbon price floor arrangement among large emitters.
- Recommends the arrangement be designed flexibly to accommodate equity considerations and constraints on national policies.
Distributional Effects and Revenue Redistribution
- Estimates the consequences of carbon pricing and redistribution of its revenues for inequality across households.
- Highlights redistribution of carbon-pricing revenues as a policy lever to address inequality impacts.
Political Economy and Implementation
- Discusses strategies for enhancing the political acceptability of carbon pricing.
- Covers administrative and fiscal considerations relevant for implementing carbon taxes or emission trading systems.
Source: Fiscal Monitor, October 2019: How to Mitigate Climate Change.
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