A Framework for Comparing Climate Mitigation Policies Across Countries
IMF Working Papers, December 16, 2022
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- A Framework for Comparing Climate Mitigation Policies Across Countries
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Bibliographic details
- Authors: Simon Black, Danielle N Minnett, Ian W.H. Parry, James Roaf, Karlygash Zhunussova
- Published: December 16, 2022
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400228285.001
Overview
- Purpose: Present and illustrate a methodology for converting climate mitigation policies and targets into their carbon price equivalents and apply it to the Group of Twenty (G20) countries.
- Rationale:
- Growing interest in international coordination over climate mitigation policy, including climate clubs or international carbon price floors.
- Such arrangements could complement the Paris Agreement by helping to deliver the near-term cuts in global greenhouse gas emissions needed to contain global warming to 1.5 to 2oC.
- To ensure inclusivity, arrangements must account for varying mitigation policies across countries, including carbon pricing, fuel taxes, subsidy reform, and non-pricing approaches like regulations.
- Need identified: A transparent methodology to compare and monitor mitigation effort across countries implementing diverse policy packages.
Methodology (conceptual)
- Core approach: Convert diverse climate mitigation policies and targets into their carbon price equivalents to enable comparable metrics across policy packages.
- Policy instruments covered:
- Carbon pricing
- Fuel taxes
- Subsidy reform
- Non-pricing approaches such as regulations (e.g., emission rate standards, industry emissions targets, sectoral targets)
- Model/tools referenced: IMF-WB Climate Policy Assessment Tool, IMF-WB CPAT Model.
- Intended outputs: Policy equivalence measures (carbon price equivalence) and quantified emissions impact and emissions reductions from policies.
Application and Scope
- Applied to: Group of Twenty (G20) countries.
- Analytical focus: Translating national mitigation policies and targets into comparable carbon price signals to assess relative mitigation effort.
- Data and themes emphasized in keywords and subject headings: Climate policy, Environment, Fuel tax, Greenhouse gas emissions, Taxes; and keywords including BAU emissions projection, carbon price equivalence, emissions impact, Emissions reductions, G20, Global, mitigation approach, non-pricing instrument, policy instrument, policy package, reductions from Policies, temperature aligned mitigation.
Key findings and implications (as presented)
- International coordination mechanisms (climate clubs, carbon price floors) can play a complementary role to the Paris Agreement in achieving near-term emission cuts.
- Inclusivity requirement: Any international arrangement should incorporate heterogeneous national policies (pricing and non-pricing) through a transparent, comparable metric.
- The carbon price equivalence methodology provides a way to:
- Compare mitigation effort across countries with diverse policy mixes.
- Monitor progress toward mitigation targets in a standardized manner.
- Inform the design of cooperative international instruments (e.g., to set floors or club terms based on comparable effort).
Policy recommendations and uses
- Use the carbon price equivalence framework to:
- Enhance transparency in international negotiations and coordination.
- Inform the design of climate clubs or international carbon price floors that accommodate diverse national approaches.
- Support monitoring and assessment of countries’ mitigation efforts using a common metric.
- Leverage the IMF-WB CPAT Model and related tools to quantify policy equivalence and emissions impacts for policymaking and international fora.
Publication metadata (selected)
- Authors: Simon Black, Danielle N Minnett, Ian W.H. Parry, James Roaf, Karlygash Zhunussova
- Date: December 16, 2022
- Series: Working Paper No. 2022/254
- Pages: 39
- DOI: https://doi.org/10.5089/9798400228285.001
- ISBN: 9798400228285
Source: IMF Working Papers — "A Framework for Comparing Climate Mitigation Policies Across Countries", Working Paper No. 2022/254 (December 16, 2022).
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