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Policy perspective:Building political support for carbon pricing—Lessons from cap-and-trade policies

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  • Raymond, Leigh

Abstract

How can governments build political support for carbon pricing? This question has challenged policy designers since the earliest programs imposing new prices on pollution, and remains a vital question today. This perspective offers insights on strategies for building greater political support for carbon pricing, based on previous experiences with long-running “auction and invest” programs in the U.S. and abroad, including the Regional Greenhouse Gas Initiative (RGGI), California's carbon pricing system, and the EU emissions trading system (ETS). Three key insights can be derived from those experiences. First: cap and trade with an auction of allowances is an important option for carbon pricing with distinctive advantages. Second, it is important to generate tangible public benefits from a carbon price that are distributed among citizens in a way that is broadly perceived as fair and addresses potential concerns about higher consumer costs for energy. Third, the most effective form of those public benefits should vary predictably across a few clearly defined categories according to local circumstances.

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  • Raymond, Leigh, 2019. "Policy perspective:Building political support for carbon pricing—Lessons from cap-and-trade policies," Energy Policy, Elsevier, vol. 134(C).
  • Handle: RePEc:eee:enepol:v:134:y:2019:i:c:s0301421519305737
    DOI: 10.1016/j.enpol.2019.110986
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    References listed on IDEAS

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