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Seven reasons to use carbon pricing in climate policy

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  • Andrea Baranzini
  • Jeroen van den Bergh
  • Stefano Carattini
  • Richard Howarth
  • Emilio Padilla
  • Jordi Roca

Abstract

The idea of a global carbon price has been a recurrent theme in debates on international climate policy. Discarded at the Conference of Parties (COP) of Copenhagen in 2009, it remained part of deliberations for a climate agreement in subsequent years. Unfortunately, there is still much misunderstanding about the reasons for implementing a global carbon price. As a result, ideological and political resistance against it prospers. Here we present the main arguments in favor of a carbon price to stimulate a fair and well-informed discussion about climate policy instruments. This includes arguments that have received surprisingly little attention so far. It is stressed that a main reason to use carbon pricing is environmental effectiveness, so not only economic efficiency (including the special case of cost-effectiveness). In addition, we provide ideas on how to implement a uniform global carbon price, whether using a carbon tax or emissions trading.

Suggested Citation

  • Andrea Baranzini & Jeroen van den Bergh & Stefano Carattini & Richard Howarth & Emilio Padilla & Jordi Roca, 2016. "Seven reasons to use carbon pricing in climate policy," GRI Working Papers 224, Grantham Research Institute on Climate Change and the Environment.
    • Handle: RePEc:lsg:lsgwps:wp224
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    References listed on IDEAS

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    Cited by:

    1. Stefano Carattini & Alessandro Tavoni, 2016. "How green are green economists?," Economics Bulletin, AccessEcon, vol. 36(4), pages 2311-2323.
    2. Stefano Carattini & Andrea Baranzini & Philippe Thalmann & Frédéric Varone & Frank Vöhringer, 2017. "Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(1), pages 97-128, September.
    3. Stefano Carattini & Simon Levin & Alessandro Tavoni, 2019. "Cooperation in the Climate Commons," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(2), pages 227-247.
    4. Fouquet, Roger & O'Garra, Tanya, 2022. "In pursuit of progressive and effective climate policies: Comparing an air travel carbon tax and a frequent flyer levy," Energy Policy, Elsevier, vol. 171(C).
    5. Jeroen C. J. M. van den Bergh, 2017. "Rebound policy in the Paris Agreement: instrument comparison and climate-club revenue offsets," Climate Policy, Taylor & Francis Journals, vol. 17(6), pages 801-813, August.
    6. Patankar, Neha & Fell, Harrison G. & Rodrigo de Queiroz, Anderson & Curtis, John & DeCarolis, Joseph F., 2022. "Improving the representation of energy efficiency in an energy system optimization model," Applied Energy, Elsevier, vol. 306(PB).
    7. Kuokkanen, Anna & Sihvonen, Markus & Uusitalo, Ville & Huttunen, Anna & Ronkainen, Tuuli & Kahiluoto, Helena, 2020. "A proposal for a novel urban mobility policy: Personal carbon trade experiment in Lahti city," Utilities Policy, Elsevier, vol. 62(C).
    8. Carattini, Stefano & Tavoni, Alessandro, 2016. "How Green are Economists?," MITP: Mitigation, Innovation and Transformation Pathways 240749, Fondazione Eni Enrico Mattei (FEEM).

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