Energy use is a major contributor to greenhouse gas emissions worldwide. Taxes and emissions trading systems are widely held to be among the most cost-effective economic policy instruments to reduce greenhouse gas emissions, and should ideally be high enough to ensure energy users are incentivised to change their behaviour.
This side event presented effective carbon rates, a new measure which shows the combined impact of carbon taxes, specific taxes on energy use, and from emissions trading systems in 41 OECD and G20 countries.
The overall message is bleak. Not only are effective carbon rates are well below the climate cost per unit of emissions in many countries and for most types of energy use, they are also very often simply too low to have any steering effect on energy use.
An expert panel discussed these measures, and potential ways forward.
EFFECTIVE CARBON RATES ON ENERGY: OECD & SELECTED PARTNER ECONOMIES
FURTHER READING: OECD Environment and taxation working papers
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