Climate Mitigation Policy in Denmark: A Prototype for Other Countries

By Nicoletta Batini, Ian W.H. Parry, Philippe Wingender

November 12, 2020

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Format: Chicago

Nicoletta Batini, Ian W.H. Parry, and Philippe Wingender. Climate Mitigation Policy in Denmark: A Prototype for Other Countries, (USA: International Monetary Fund, 2020) accessed October 3, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark’s mitigation strategy, pricing needs to be effective, address equity and leakage concerns, and be reinforced by additional measures at the sectoral level. The strategy Denmark develops can be a good prototype for others to follow. This paper discusses mechanisms to scale up domestic carbon pricing, compensate households, and possibly combine pricing with a border carbon adjustment. It also recommends the use of revenue-neutral feebate schemes to strengthen mitigation incentives, particularly for transportation and agriculture, fisheries and forestry, though these schemes could also be applied more widely.

Subject: Agricultural commodities, Carbon tax, Climate change, Consumption, Environment, Greenhouse gas emissions, Health, National accounts, Taxes

Keywords: Agriculture, Agriculture., Border carbon adjustment, Carbon pricing, Carbon tax, Climate change, Consumption, Denmark climate mitigation, Emission rate, Emissions price, Energy price, EU ETS, Feebate, Global, Greenhouse gas, Greenhouse gas emissions, Mitigation target, Nitrogen oxide emission, Proxy emissions fee, Revenue recycling, Sliding scale, Transportation, WP

Publication Details

Pages:

58
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2020/235
Stock No:

WPIEA2020235
ISBN:

9781513560960
ISSN:

1018-5941

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