Tag: carbon tax

What a carbon tax can do and why it cannot do it all

What a carbon tax can do and why it cannot do it all

January 30, 2022 |

A carbon tax reflecting the social cost of carbon is viewed as an essential policy tool to limit carbon emissions: high prices for carbon-emitting goods reduce demand for them. The carbon tax is generally levied on fossil fuels.  Some countries have already adopted such a tax and discussions are ongoing in others. There are proponents of a global carbon tax too. Yet, governments are often keener to adopt measures other than a tax to contain carbon emissions.

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Clean Electricity Standard and Carbon Tax in the US

Clean Electricity Standard and Carbon Tax in the US

December 28, 2021 | ,

A carbon tax and clean electricity standard (CES) are similar policies in some ways. Both have the potential to drive large emissions reductions from the US power sector and beyond. If the CES is designed to be technology-neutral with tradable credits for clean electricity generation, both policies would operate as market-based mechanisms to encourage such generation.

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The EU’s Carbon Border Adjustment Mechanism – Trendsetter, or doomed to fail?

The EU’s Carbon Border Adjustment Mechanism – Trendsetter, or doomed to fail?

December 16, 2021 | ,

As part of its efforts to tackle climate change, the European Commission has proposed the introduction of a new carbon border adjustment mechanism (CBAM) which aims to address the issue of “carbon leakage” – this involves EU companies moving carbon-intensive production to other countries to take advantage of lower standards or EU companies importing cheaper, more carbon-intensive products.

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Modeling the U.S. Climate Agenda

Modeling the U.S. Climate Agenda

December 14, 2021 | ,

The U.S. administration has recently unveiled new climate targets. This paper “Modeling the U.S. Climate Agenda: Macro-Climate Trade-offs and Considerations” by Philip Barrett, Katharina Bergant, Jean Chateau, and Rui Mano elaborates on the administration’s plans and uses two models developed at the IMF to illustrate key macro-climate trade-offs.

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Addressing climate change through carbon taxes

Addressing climate change through carbon taxes

June 16, 2021 |

Research shows that putting a price on carbon-based fuels, in the form of a fee or tax, can be an effective way of reducing GHG emissions and pollution levels across the globe. By placing higher taxes on carbon-based fuels, households and industries can reduce the level of pollution and look to alternatives like solar power and hydrogen engines, which have lower impacts on the environment. The implementation of a carbon tax system, therefore, provides an incentive for businesses and industries to develop more environmentally friendly production processes.

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