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Global Carbon Pricing: Progress and Prospects
August 24, 2023
Presentation Slides:�cclusa.org/carbon-�pricing-around-world
About Our Speaker
Jonathan Marshall
CCL volunteer and former Economics Research Coordinator
Carbon-Fee-and-Dividend Still Tops CCL’s Agenda
“We advocate for a carbon fee and dividend with a carbon border adjustment mechanism (CBAM), to lower emissions and deliver abundant and affordable clean energy to Americans.”
Three Learning Goals
Learn what factors build public support for carbon pricing
Learn about the global progress of carbon pricing and why it will likely continue
Understand why carbon pricing remains an essential policy tool for climate mitigation
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Why carbon pricing is needed as much as ever (1)
Why carbon pricing is needed as much as ever (2)
A carbon tax of just $50/t/CO2, rising 7% per year, would slash U.S. carbon emissions at twice the rate achieved by IRA-type subsidies for clean electrification.
Why the IRA Improves Prospects for US Carbon Pricing
“Policymakers are more likely to price carbon appropriately if it is cheaper to move onto a low-carbon path.” �� – Gernot Wagner
Dividends Improve Support for Carbon Pricing�
Support for carbon taxes of $50/t (“low”) and $230/t (“high”) jumped in the U.S. and Switzerland when individuals were informed of the impact of carbon dividends on their personal finances.
Carbon Dividends Promote Fairness
Percent of households whose carbon dividends exceed carbon costs, ranked by consumption quintile. The lighter green denotes a “minor loss,” defined as less than 0.2 percent of income (e.g., for a $50,000 income, less than $100 per year)
Lower-income households on average have smaller carbon footprints and would be net beneficiaries of a carbon fee and dividend.
Carbon Pricing is Expanding Worldwide
Nearly a quarter of global carbon dioxide emissions are now covered by carbon pricing systems, up from just 7% a decade ago.
The Global Map of Carbon Pricing
Carbon Prices are Rising in Many Countries (2)
Carbon Prices are Rising in Many Countries
The Impact of Carbon Pricing is Soaring
Carbon pricing revenues are a good summary of total impact. They are a product of total coverage and price.
The Impact of Carbon Pricing is Proven
After Great Britain introduced a carbon tax in its power sector in 2013 (about $7.75, rising to $27 in 2015), CO2 emissions fell 61% in six years, led by a steep decline in �coal generation.
Britain's power sector emissions by source (MtCO2)
The Impact of Carbon Pricing is Proven (2)
On average, carbon dioxide emissions fell 2% per year over 2007–2017 in countries with a carbon price in 2007 and increased by 3% per year in the others—a difference of 5% per year.
Time to Advocate for Carbon Dividends (1)
Canada’s Carbon Dividend, 2023-24
Time to Advocate for Carbon Dividends (2)
“To maintain strong public support for climate action, policymakers can pair stringent policies with visible compensation and adapt measures to external events that increase the vulnerability of households to high energy prices.”
Support Border Carbon Adjustments
The European Union’s CBAM has two main goals: to encourage non-EU countries to “increase their climate ambition,” and to ensure that the EU’s climate mitigation policies “are not undermined by production being relocated from the EU to countries with less ambitious policies.”
Good Climate Policies Can ‘Go Viral’
“Climate policy adoption in one country increases the probability of adoption in neighboring countries. Governments can thus support global climate action by adopting a leadership role in climate policy and do not need to worry about free-riding behavior.”
We Have a Long Way to Go—So Let’s Keep Moving
For more information
For more information and answers to frequently asked questions, see CCL’s Understanding Carbon Pricing Policy and Nerd Corner Policy and Economics resources pages.
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Join us in Nerd Corner: cclusa.org/nerd-corner��Jonathan Marshall Email: jvmarsha7@gmail.com
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