“This study provides a useful fact-based overview and a sort of template which can facilitate governments in designing effective carbon pricing policies”
The evidence shows that the effectiveness of these mechanisms in reducing emissions and their applicability are affected by regulatory stability, distributional effects, interactions with other policies and the impact on global trade.
To provide an overall and comprehensive picture, the study proceeds by developing three content sections. After analysing the stylistic facts correlated with the adoption of carbon pricing mechanisms, the second section revisits the historical experience of 11 national and 2 sub-national jurisdictions which have implemented carbon pricing or have tried in vain to do so. Finally, Chile and Colombia, which are in the process of implementing carbon pricing policies, were analyzed as case studies. They both present characteristics which could favor effective and stable implementation.
“This analysis identifies and assesses the key drivers influencing the adoption of carbon pricing mechanisms by governments, and more importantly, how to overcome the many barriers to successful policy implementation. Carbon pricing may never be politically feasible, but there are ways to structure pricing and subsidies that make adoption more likely; this work is significant in identifying how carbon pricing might be effectively structured.”