1887

OECD Economic Policy Papers

The OECD Economic Policy Papers series is designed to make available selected studies on structural and macro-economic policy issues of current interest. The Papers are produced in the context of the work carried out on the two regular OECD titles, OECD Economic Outlook and Going for Growth.

English

A framework to decarbonise the economy

Global progress towards tackling climate change is lagging. This paper puts forward a framework to design comprehensive decarbonisation strategies while promoting growth and social inclusion. It first highlights the need of evaluating a country’s national climate targets and current policy mix, in conjunction with facilitating monitoring tools to assess current and future progress, as a key step to design effective decarbonisation strategies. It then provides a detailed comparison of several policy instruments across different assessment criteria, which indicates that no single instrument is clearly superior to all others. This highlights the need for developing decarbonisation strategies based on a wide policy mix consisting of three main components: 1) emission pricing policy instruments; 2) standards and regulations; 3) complementary policies to facilitate the reallocation of capital, labour and innovation towards low-carbon activities and to offset the adverse distributional effects of reducing emissions. However, there is no one-size-fits-all policy mix, as feasible policy choices depend on countries’ industrial structure, social preferences and political constraints. A robust and independent institutional framework, stakeholders engagement and credible communication campaigns are key to managing these constraints and ultimately enhancing public acceptance of climate mitigation policies.

English

Keywords: mitigation policies, growth and inclusion, green R&D and innovation, political economy of climate policy, emission pricing, climate change, green investments, green standards and regulations
JEL: Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; Q55: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Technological Innovation; P48: Economic Systems / Other Economic Systems / Other Economic Systems: Political Economy; Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies; Q52: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Pollution Control Adoption and Costs; Distributional Effects; Employment Effects; Q42: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Alternative Energy Sources; Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming; H54: Public Economics / National Government Expenditures and Related Policies / National Government Expenditures and Related Policies: Infrastructures; Other Public Investment and Capital Stock
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error