1887

Effective Carbon Rates

Pricing CO2 through Taxes and Emissions Trading Systems

image of Effective Carbon Rates

To tackle climate change, CO2 emissions need to be cut. Pricing carbon is one of the most effective and lowest-cost ways of inducing such cuts. This report presents the first full analysis of the use of carbon pricing on energy in 41 OECD and G20 economies, covering 80% of global energy use and of CO2 emissions. The analysis takes a comprehensive view of carbon prices, including specific taxes on energy use, carbon taxes and tradable emission permit prices. It shows the entire distribution of effective carbon rates by country and the composition of effective carbon rates by six economic sectors within each country. Carbon prices are seen to be often very low, but some countries price significant shares of their carbon emissions. The ‘carbon pricing gap’, a synthetic indicator showing the extent to which effective carbon rates fall short of pricing emissions at EUR 30 per tonne, the low-end estimate of the cost of carbon used in this study, sheds light on potential ways of strengthening carbon pricing.

English

.

Estimating effective carbon rates

This Annex describes the methodology used to estimate the effective carbon rates (ECRs) presented in this report. Section A.1 provides details on the concept of ECRs and their three components: carbon taxes, specific taxes on energy use and tradable emission permit prices. Section A.2 gives an overview of the data and methodology used to estimate permit prices and coverage of emissions trading systems. Section A.3 discusses how the estimates of permit prices and ETS coverage are combined with information on carbon taxes and other specific taxes on energy use to produce estimates of ECRs.

English

Tables

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