![]() ![]() This paper aims to contribute to the debate on the choice of policies to reach the more ambitious 2030 emission reduction goals currently under consideration. This paper discusses sectoral policies needed to achieve the ambitious greenhouse gas (GHG) emissions reduction targets announced in the European Union’s Green Deal, complementing the companion paper “EU Climate Mitigation Policy”, which focuses on broader EU-level policies.ĮU Climate Mitigation Policy (September 16, 2020) Sectoral Policies for Climate Change Mitigation in the EU (September 16, 2020) It also recommends the use of revenue-neutral feebate schemes to strengthen mitigation incentives, particularly for transportation and agriculture, fisheries and forestry, though these schemes could also be applied more widely. This paper discusses mechanisms to scale up domestic carbon pricing, compensate households, and possibly combine pricing with a border carbon adjustment. 4 PDF VERSION Nature’s Solution to Climate ChangeĪ strategy to protect whales can limit greenhouse gases and global warming.Ĭlimate Mitigation Policy in Denmark: A Prototype for Other Countries (November 12, 2020) ![]() Strategies for enhancing the political acceptability of carbon pricing are discussed, along with supporting measures to promote clean technology investments.įINANCE & DEVELOPMENT, DECEMBER 2019, VOL. The report estimates the consequences of carbon pricing and redistribution of its revenues for inequality across households. At the international level, the report calls for a carbon price floor arrangement among large emitters, designed flexibly to accommodate equity considerations and constraints on national policies. Alternative approaches, like “feebates” to impose fees on high polluters and give rebates to cleaner energy users, can play an important role when higher energy prices are difficult politically. It provides a quantitative framework for understanding their effects and trade-offs with other instruments and applies it to the largest advanced and emerging economies. This report emphasizes the environmental, fiscal, economic, and administrative case for using carbon taxes, or similar pricing schemes such as emission trading systems, to implement climate mitigation strategies. The analysis in this chapter suggests that an initial green investment push combined with steadily rising carbon prices would deliver the needed emission reductions at reasonable transitional global output effects, putting the global economy on a stronger and more sustainable footing over the medium term.įiscal Monitor October 2019 How to Mitigate Climate Change Without further action to reduce greenhouse gas emissions, the planet is on course to reach temperatures not seen in millions of years, with potentially catastrophic implications. World Economic Outlook October 2020 How to Mitigate Climate Change ![]() And even when energy is heavily taxed, these taxes may not be very effective from an environmental perspective (e.g., taxes may be imposed on electricity use or vehicle sales rather than emissions or traffic congestion). Many countries subsidize the production and consumption of fossil fuels (rather than charging to discourage their use). The key is to retool the tax system in fair, creative, and efficient ways.On the expenditure side, carbon taxes can be used to support low-income households and to support firms and households that choose green pathways. But carbon taxes must be implemented in a careful and growth-friendly fashion. Carbon taxes are one of the most powerful and efficient tools at their disposal-the latest IMF analysis finds that large emitting countries need to introduce a carbon tax that rises quickly to $75 a ton in 2030, consistent with limiting global warming to 2☌ or less. The Fund is intensifying its work on carbon pricing and helping governments craft road maps as they navigate their way from brown economies dependent on carbon to green ones that strive to be carbon free. ![]()
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