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Parallel tracks towards a global treaty on carbon pricing

Author

Listed:
  • Jeroen C.J.M. van den Bergh

    () (Universitat Autònoma de Barcelona, ICREA & VU University Amsterdam)

  • Arild Angelsen

    (Norwegian University of Life Sciences)

  • Andrea Baranzini

    (University of Applied Sciences Western Switzerland)

  • W.J. Wouter Botzen

    (VU University Amsterdam & Utrecht University)

  • Stefano Carattini

    (Yale School of Forestry & Environmental Studies, Grantham Research Institute & London School of Economics and Political Science)

  • Stefan Drews

    (Universitat Autònoma de Barcelona)

  • Tessa Dunlop

    (Universitat Autònoma de Barcelona)

  • Eric Galbraith

    (Universitat Autònoma de Barcelona & ICREA)

  • Elisabeth Gsottbauer

    (University of Innsbruck)

  • Richard B. Howarth

    (Dartmouth College)

  • Emilio Padilla

    (Universitat Autònoma de Barcelona)

  • Jordi Roca

    (Universitat de Barcelona)

  • Robert Schmidt

    (University of Kaiserslautern)

Abstract

We argue that a global carbon price is the only way to effectively tackle free riding in international climate policy, required to substantially reduce greenhouse gas emissions. We briefly review the main reasons behind the essential role of carbon pricing, address common misunderstandings and scepticism, and identify key complementary policy instruments. Negotiating global carbon pricing is argued to be much easier than negotiating binding country-level targets, especially if it includes equitable revenue recycling. Moreover, a global carbon price can be more readily adapted to new data and insights of climate science. We propose a political strategy towards a global carbon price that consists of two tracks. The first entails assembly of a carbon-pricing club, a specific case of a climate club, to gradually move towards a full participatory agreement on carbon pricing. The second track involves putting time and energy into re-focusing UNFCCC negotiations on a carbon-pricing agreement. The two tracks reinforce one another, increasing the likelihood of a successful outcome.

Suggested Citation

  • Jeroen C.J.M. van den Bergh & Arild Angelsen & Andrea Baranzini & W.J. Wouter Botzen & Stefano Carattini & Stefan Drews & Tessa Dunlop & Eric Galbraith & Elisabeth Gsottbauer & Richard B. Howarth & Em, 2018. "Parallel tracks towards a global treaty on carbon pricing," Working Papers 2018/12, Institut d'Economia de Barcelona (IEB).
  • Handle: RePEc:ieb:wpaper:doc2018-12
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    Keywords

    Carbon Tax; Carbon Market; Cap-and-Trade; Tradable Permits; Equity; Climate Agreement; Climate Club;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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