## A Comprehensive Greenhouse Gas Mitigation Strategy for The Netherlands

_IMF Working Papers, August 20, 2021_

## Source details

**Canonical URL:** [A Comprehensive Greenhouse Gas Mitigation Strategy for The Netherlands](https://www.imf.org/en/publications/wp/issues/2021/08/20/a-comprehensive-greenhouse-gas-mitigation-strategy-for-the-netherlands-464339)

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## Bibliographic details
- Authors: Nicoletta Batini, Simon Black, Oana Luca, Ian W.H. Parry
- Published: August 20, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513593388.001

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### Summary
- The Netherlands has targets to cut greenhouse gas emissions by 49 percent below 1990 levels by 2030 and 95 percent by 2050.
- The paper examines the government’s mitigation strategy in the context of likely new EU-wide targets under the EU Green Deal and proposes complementary measures to accelerate decarbonization and better align effective carbon prices across sectors.
- The paper evaluates alternatives to the recently-introduced industry carbon levy and recommends revenue-neutral feebate schemes in industry, transportation, buildings, and agriculture.
- For power generation, the paper recommends eliminating taxes on residential and industrial electricity and supplementing the coal phaseout plan with an increase in the CO2 emissions floor price.
- The paper finds the impacts of these reforms on consumption would be low and relatively evenly split across the income distribution.

### Key findings and diagnostics
- Emission reduction targets: 49 percent below 1990 levels by 2030; 95 percent by 2050.
- Rapid acceleration in decarbonization is required to meet national targets and anticipated EU-wide targets under the EU Green Deal.
- Current policy tools create misalignment of effective carbon prices across sectors; policy reforms can improve efficiency and alignment.
- The recently-introduced industry carbon levy could be modified to improve efficiency; alternatives are discussed in the paper.

### Policy recommendations
- Use revenue-neutral feebate schemes across:
  - Industry
  - Transportation
  - Buildings
  - Agriculture
- Modify the industry carbon levy to increase efficiency (paper discusses alternatives).
- Power sector reforms:
  - Eliminate taxes on residential electricity.
  - Eliminate taxes on industrial electricity.
  - Supplement the coal phaseout plan with an increase in the CO2 emissions floor price.
- Design reforms to ensure low aggregate consumption impacts and an even distribution of costs across income groups.

### Impacts and distributional considerations
- Consumption impacts of the proposed reforms are expected to be low.
- The reforms’ distributional effects are projected to be relatively evenly split across the income distribution.

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## Content in this bundle

- **Working Paper**
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  - [Working Paper (PDF)](/-/media/files/publications/wp/2021/english/wpiea2021223-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/wp/issues/2021/08/20/a-comprehensive-greenhouse-gas-mitigation-strategy-for-the-netherlands-464339_