Tracking global carbon revenues: A survey of carbon taxes versus cap-and-trade in the real world

Carl, Jeremy; Fedor, David

doi:10.1016/j.enpol.2016.05.023

Cited by 216 publications

(96 citation statements)

References 39 publications

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“…A tax and an ETS both generate revenue; the latter mainly from auctioned allowances. 10 The revenue is generally used for one or more of the following purposes: financing mitigation and adaptation measures, addressing inequitable impacts of the instrument on low income groups, providing rebates to energy-intensive, tradeexposed (EITE) firms, reducing existing taxes and general revenues (Carl & Fedor, 2016;Métivier et al, 2018). Commitments relating to the use of the revenue may be important for gaining public support for the instrument.…”

Section: Theoretical Designmentioning

confidence: 99%

“…As shown in Table 1, as of August 2017, the average tax rate (US$ 12.10) is over 50% higher than the average ETS allowance price (US$ 7.86). 17 The tax rates range from less than US$ 1 to US$ 140 tCO 2 e while ETS prices range from less than US$ 1 to US$ 24 tCO 2 e. The revenue generated by these instruments in 2013 was almost US$ 20 billion; US$ 13 billion by carbon taxes and US$ 6.5 billion by ETSs (Carl & Fedor, 2016). 18 By 2017 it had increased to US$ 32 billion; US$ 21 billion by taxes and US$ 11 billion by ETSs .…”

Section: Existing Carbon Taxes and Ghg Etssmentioning

confidence: 99%

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Carbon taxes and greenhouse gas emissions trading systems: what have we learned?

Haites

2018

Climate Policy

234

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Systematic evidence relating to the performance of carbon pricingcarbon taxes and greenhouse gas (GHG) emissions trading systems (ETSs)is sparse. In 2015, 17 ETSs were operational in 55 jurisdictions while 18 jurisdictions collected a carbon tax. The papers in this special thematic section review the performance of many of these instruments over the 2005-2015 period. The performance of existing carbon taxes and GHG ETSs can help policy makers make informed choices about whether to introduce these instruments and to improve their design. The purpose of carbon pricing instruments is to reduce GHG emissions cost effectively. Assessing their performance is difficult because emissions are also affected by other policies and exogenous factors such as economic conditions. Carbon taxes in Europe prior to 2008 and in British Columbia reduced emissions from business-as-usual but actual emissions continued to rise. Since 2008 emissions subject to European carbon taxes have declined, but in most countries, other mitigation policies have probably contributed more to the reductions than the carbon taxes. Emissions subject to ETSs, with the exception of four systems without emissions caps, have declined. The ETSs contributed to the emissions reductions, but their share of the overall reduction is not known. Most tax rates are low relative to levels thought to be needed to achieve climate change objectives. Few jurisdictions regularly adjust their tax rates. All ETSs have accumulated surplus allowances and implemented measures to reduce these surpluses. The largest ETSs now specify annual reductions in their emissions cap several years into the future. Emissions trading system allowance prices are generally lower than the tax rates.Key policy insights . Theoretical discussions usually portray carbon taxes and GHG ETSs as alternatives.In practice, a jurisdiction often implements both instruments to address emissions by different sources. . Designs of ETSs have evolved based on experience shared bilaterally and via dedicated institutions. . Carbon tax designs, in contrast, have hardly evolved and there are no institutions dedicated to sharing experience. . Every jurisdiction with an ETS and/or carbon tax also has other policies that affect its GHG emissions. ARTICLE HISTORYCarbon pricing can be implemented using either of two instrumentsa carbon tax or a GHG emissions trading system (ETS). With a tax, the government sets the tax rate and specifies the sources subject to the tax. The emission reduction achieved depends upon the response of the affected sources to the imposition of the tax. With an ETS the government sets a limit on GHG emissions by specified sources and distributes allowances approximately equal to the limit. 2 Allowances are tradable. Each source must surrender allowances equal to its actual emissions to the government. Emissions cannot exceed the limit, but the compliance cost depends on the market price of allowances.There is an extensive literature on the relative merits of these two instruments (e.g. Partnersh...

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Section: Theoretical Designmentioning

confidence: 99%

Section: Existing Carbon Taxes and Ghg Etssmentioning

confidence: 99%

Carbon taxes and greenhouse gas emissions trading systems: what have we learned?

Haites

2018

Climate Policy

234

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“…Drake et al [38] looked at how cap-and-trade scheme and carbon tax influence the optimal decision of firm. Carl and Fedor [39] analyzed public revenue generated from global carbon tax and cap-and-trade scheme. They found that carbon taxes generate a range of revenues per capita, but today's cap-and-trade Sustainability 2018, 10, 821 5 of 25 scheme generates only moderate revenues per capita.…”

Section: Cap-and-trade Schemementioning

confidence: 99%

Cooperation Modes of Operations and Financing in a Low-Carbon Supply Chain

Yang

Chen

2018

Sustainability

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Abstract:With the significant increase of fossil energy consumption and the ever-worsening pollution of environment, low-carbon development becomes an inevitable choice. Carbon finance can help firms alleviate the finance pressure from carbon emission reduction. This research explores two financing methods, delay-in-payment and bank loan; and two cooperation decisions, carbon emission reduction cooperation and price cooperation. Four scenarios are considered: non-cooperation, partial-cooperation delay-in-payment, supply chain carbon finance (SCCF), and full-cooperation. We discuss how firms make their pricing and carbon emission reduction decisions under different cooperative levels and financing methods. For a manufacturer-dominated supply chain, the results show that SCCF will help the small and medium enterprise seek cooperation with the monopoly manufacturer, and improve supply chain's profit compared to green loan. What's more, SCCF pattern can effectively control the total carbon emission. In addition, we extend the model to consider the retailer-dominated case. The results show that SCCF pattern can help increase the emission reduction rate of the whole supply chain. From the perspective of emission reduction efficiency, it is better for the government to promote the SCCF mode in the retailer-dominated supply chain.

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“…These market-based policy instruments would lead to larger emission cuts for a given costs, and could be implemented directly as a carbon tax or indirectly via an emissions trading system (ETS). A carbon price could bring co-benefits (such as energy access and reduced pollution ;Edenhofer et al 2015), generate significant revenues over the 21st century (Bauer et al 2016), and the revenues generated can be used to achieve other societal objectives (Carl and Fedor 2016). Some sort of direct or indirect carbon price has been successfully implemented by about 40 nations already, covering about 13% of global CO 2 emissions in 2016 (World Bank 2016).…”

Section: Introductionmentioning

confidence: 99%

Distributions of carbon pricing on extraction, combustion and consumption of fossil fuels in the global supply-chain

Karstensen

Peters

2018

Environ. Res. Lett.

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Pricing carbon is one of the most important tools to reduce emissions and mitigate climate change. Already, about 40 nations have implemented explicit or implicit carbon prices, and a carbon price was explicitly stated as a mitigation strategy by many nations in their emission pledges submitted to the Paris Agreement. The coverage of carbon prices varies significantly between nations though, often only covering a subset of sectors in the economy. We investigate the propagation of carbon prices along the global supply-chain when the carbon price is applied at the point where carbon is removed from the ground (extraction), is combusted (production), or where goods and services are consumed (consumption). We consider both the regional and sectoral effects, and compare the carbon price income and costs relative to economic output. We find that implementation using different accounting systems makes a significant difference to revenues and increased expenditure, and that domestic and global trade plays a significant role in spreading the carbon price between sectors and countries. A few single sectors experience the largest relative price increases (especially electricity and transport), but most of the carbon price is ultimately paid by households for goods and services due to the large expenditure and indirect supply chain impacts. We finally show that a global carbon price will generate a larger share of revenue relative to GDP in non-OECD nations than OECD nations, independent on the point of implementation.

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Tracking global carbon revenues: A survey of carbon taxes versus cap-and-trade in the real world

Cited by 216 publications

References 39 publications

Carbon taxes and greenhouse gas emissions trading systems: what have we learned?

Carbon taxes and greenhouse gas emissions trading systems: what have we learned?

Cooperation Modes of Operations and Financing in a Low-Carbon Supply Chain

Distributions of carbon pricing on extraction, combustion and consumption of fossil fuels in the global supply-chain

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