Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries
IMF Working Papers, August 30, 2018
Source details
- Canonical URL
- Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries
Other formats
Bibliographic details
- Authors: Ian W.H. Parry, Victor Mylonas, Nate Vernon-Lin
- Published: August 30, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484373842.001
Overview and objectives
- Authors: Ian W.H. Parry, Victor Mylonas, Nate Vernon-Lin
- Date: August 30, 2018
- Paper series: IMF Working Papers, Working Paper No. 2018/193
- Pages: 56
- DOI: https://doi.org/10.5089/9781484373842.001
- Key aims:
- Provide a quantitative framework to assess: i) the main impacts (on GHGs, fiscal balances, the domestic environment, economic welfare, and distributional incidence) of emissions pricing; ii) trade-offs between pricing and other commonly used mitigation instruments; and iii) why/to what extent needed policies and their impacts differ across countries.
- Illustrate implications for G20 member countries under plausible projections for future fuel use and price responsiveness.
Major findings
- Coverage and scope:
- The analysis focuses on G20 member countries, which account for about 80 percent of global emissions.
- Mitigation commitments or pledges were submitted by 190 countries for the 2015 Paris Agreement.
- Comparative performance of instruments:
- Quantitative results underscore the generally strong case for comprehensive pricing over other instruments.
- Pricing typically yields small net costs or often net benefits when domestic environmental gains are considered.
- Efficiency and distributional concerns:
- There is potentially wide dispersion (and hence inefficiency) in emissions prices implied by countries’ mitigation commitments.
- Analytical emphasis:
- The framework evaluates impacts on greenhouse gases (GHGs), fiscal balances, the domestic environment, economic welfare, and distributional incidence, and examines fuel price responsiveness and fuel use projections.
Policy implications and recommendations
- Emissions pricing:
- Comprehensive emissions pricing is generally favored relative to alternative mitigation instruments, given its efficiency advantages.
- Policymakers should consider domestic environmental gains when assessing net costs, as these can convert small net costs into net benefits.
- Addressing price dispersion:
- The wide dispersion in implied emissions prices across countries suggests scope for efficiency gains, either through alignment of national prices or international coordination mechanisms.
- Consideration of responsiveness and projections:
- Policy design should account for uncertainty in future fuel use and fuel price responsiveness to improve expected outcomes.
Subject tags and keywords (as provided)
- Subject: Carbon tax, Environment, Fuel prices, Fuel tax, Greenhouse gas emissions, Non-renewable resources, Prices, Taxes
- Keywords: Africa, air pollution mortality, carbon pricing, Carbon tax, climate mitigation, co, cost increase, countries flexibility, electricity Co, fuel price elasticity, fuel price response, fuel price responsiveness, Fuel prices, Fuel tax, G20 countries, Global, Greenhouse gas emissions, instrument choice, monopoly price distortion, Non-renewable resources, Paris Agreement, percent Co, price change, price projection, responsiveness of emission, road fuel price elasticity, tax incidence, tons Co, welfare cost, welfare effects, WP
Source: Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries, Ian W.H. Parry; Victor Mylonas; Nate Vernon-Lin, IMF Working Paper No. 2018/193 (August 30, 2018).
Content in this bundle
- Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries, WP/18/193, August 2018