Publication: What is the Role of Carbon Taxes in Climate Change Mitigation? (revised)
Loading...
An error occurred retrieving the object's statistics
Date
2010-04
ISSN
Published
2010-04
Author(s)
Aldy, Joseph
Ley, Eduardo
Parry, Ian
Editor(s)
Abstract
This note argues that a carbon tax system is more practical to implement, monitor, and enforce than tradable permit-based approaches to global climate-change action. It suggests that a sensible design will be an upstream carbon tax on the fossil fuel supply chain, which can also include other major non-carbon dioxide (CO2) greenhouse gases (GHGs). While risks such as fiscal cushioning exist, a tax-based system will be more transparent and offer the appropriate incentives for participation and compliance.
Link to Data Set
Citation
“Aldy, Joseph; Ley, Eduardo; Parry, Ian. 2010. What is the Role of Carbon Taxes in Climate Change Mitigation? (revised). PREM notes;no. 2. Special series on the
economics of climate change. © http://hdl.handle.net/10986/20115 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication What is the Role of Carbon Taxes in Climate Change Mitigation?(World Bank, Washington, DC, 2008-07)This note argues that a carbon tax system is more practical to implement, monitor and enforce than tradable permit-based approaches to global climate-change action. It suggests that a sensible design will be an upstream carbon tax on the fossil fuel supply chain, which can also include other major non-(carbon monoxide) CO2 greenhouse gases (GHGs). While risks such as fiscal cushioning exist, a tax-based system will be more transparent and offer the appropriate incentives for participation and compliance.Publication Assessment of Net Mitigation in the Context of International Greenhouse Gas Emissions Control Mechanisms(World Bank, Washington, DC, 2016-03)This paper discusses the scope for market mechanisms, already established for greenhouse gas mitigation in Annex 1 countries that ratified the Kyoto Protocol, for implementing "net mitigation," defined here as mitigation beyond Annex 1 countries' formal mitigation requirements under the Kyoto Protocol. Such market mechanisms could be useful for establishing and extending greenhouse gas mitigation targets also under the Paris Agreement from December 2015. Net mitigation is considered in two possible forms: as a "net atmospheric benefit," or as an “own contribution” by offset host countries. A main conclusion is that a “net atmospheric benefit” is possible at least in the short run, best implemented via stricter baselines against which offsets are credited; but it can also take the form of offset discounting whereby offset buyers are credited fewer credits. The latter, although generally inefficient, can be a second-best response to certain imperfections in the offset market, which are discussed in the paper. There is less merit for claiming that "own contributions" can lead to additional mitigation under existing mechanisms.Publication Climate Change and Economic Policies in APEC Economies : Synthesis Report(World Bank, 2010-11-17)Drawing on several studies on APEC economies, this report discusses economic policy choices for mitigating and adapting to climate change effects. It highlights that APEC economies will have a central role in both sides of climate change. These economies include some of the largest emitters and also those among the most vulnerable to the impact of climate change. The report suggests that action on climate change will require a wide range of economic policy interventions, including most importantly fiscal policies. These will include setting carbon prices that cost emissions properly, liberalizing and strengthening markets so that prices and costs can be passed- through, offsetting other biases towards capital and emissions intensive economic growth and supporting technology based policies. On the adaptation side, the report emphasizes the importance of fiscal policy and investment choice tools that incorporate the uncertainty surrounding the nature and location of climate change effects. The report discusses how emissions reduction through appropriate climate friendly technologies (CFTs) can be an important complement to more politically sensitive mitigation measures (like carbon pricing). At the same time, CFTs can provide co-benefits like rural electrification. The current status of CFTs in APEC economies - their production, use and trade - are discussed along with technology neutral and technology specific policies and trade and investment policies that can support these technologies. Financing these policy interventions - both technology based and otherwise - will require various measures, including efficient market mechanisms that create incentives to reduce mitigation costs, facilitate financing of mitigation efforts through crediting mechanism and emissions trading, and setting up the necessary institutions. This report also considers policy responses to extreme climate events and their impact on the poor at the community level. Finally, since climate change is inherently of a cross-border, regional and even global nature, there is substantial scope for regional cooperation by APEC economies to address climate change issues. This report concludes with some initial thoughts on some key areas for this cooperation.Publication Technical Guide to Actions on Global Warming and Clean Development Mechanism in Sri Lanka(World Bank, Washington, DC, 2012)The Ministry of Environment and Natural Resources of the Government of Sri Lanka is the apex body under which all environmental issues and policy matters are addressed. The Global Affairs Division of the Ministry of Environment and Natural Resources is tasked with formulating policy and strategic planning and liaise with the international organizations dealing with global environmental issues and is the Designated National Authority (DNA) for matters arising out of the Kyoto Protocol. Under the Kyoto protocol, the Clean Development Mechanism (CDM) provides for Green House Gas (GHG) mitigation projects that contribute towards sustainable development in developing nations and the net emission reductions can be traded to a developed nation to meet its Kyoto obligations. The report begins with green house effect with GHG emissions and their contributions to global warming. To highlight the gravity of the problem various projections are presented on future climate change, extreme weather events, sea level rise and their impact on developing countries. It describes the global initiative to tackle climate change and specifically details the Kyoto protocol.Publication Transition to a Low-Emissions Economy in Poland(Washington, DC, 2011-02)Against the backdrop of agreement that global coordinated action is needed to prevent dangerous climate change, individual countries are thinking through the implications of climate action for their economies and people. The rest of the report is organized along the following lines. The next section provides background on Poland's greenhouse gas (GHG) emissions. Then section B sets out Poland's existing carbon abatement targets and key policy challenges related to GHG mitigation. The next section summarizes the innovative methodological approach used by the report. Section D discusses the methods and implications of constructing business-as-usual or reference scenarios. Section E provides the major findings from the first model, the engineering approach, on the costs of measures aimed at GHG mitigation for Poland. Section F explains how these findings are expanded and revised by incorporation into the first macroeconomic model. Section G provides an analysis of the economic impact through 2020 of mitigation measures within the constraints of European Union (EU) policy arrangements. Section H examines the energy sector and how Section E's findings are enhanced by optimization of the structure of the energy sector. Section I takes a first look at the challenges of energy efficiency. Section J provides additional analysis of the transport sector. The last section provides some notes on additional issues and further work.
Users also downloaded
Showing related downloaded files
Publication The Mexican Social Protection System in Health(World Bank, Washington DC, 2013-01)With a population of 113 million and a per-capita Gross Domestic Product, or GDP of US$10,064 (current U.S. dollars), Mexico is one of the largest and highest-income countries in Latin America and the Caribbean (LAC). The country has benefited from sustained economic growth during the last decade, which was temporarily interrupted by the financial and economic crisis. Real GDP is projected to grow 3.8 percent and 3.6 percent in 2012 and 2013, respectively (International Monetary Fund, or IMF 2012). Despite this growth, poverty in the country remains high; with half of the population living below the national poverty line. The country is also highly heterogeneous, with large socioeconomic differences across states and across urban and rural areas. In 2010, while the extreme poverty ratio in the Federal District and the states of Colima and Nuevo Leon was below 3 percent, in Chiapas, Guerrero, and Oaxaca it was 25 percent or higher. These large regional differences are also found in other indicators of well-being, such as years of schooling, housing conditions, and access to social services. This case study assesses key features and achievements of the Social Protection System in Health (Sistema de Proteccion Social en Salud) in Mexico, and particularly of its main pillar, Popular Health Insurance (Seguro Popular, PHI). It analyzes the contribution of this policy to the establishment and implementation of universal health coverage in Mexico. In 2003, with the reform of the General Health Law, the PHI was institutionalized as a subsidized health insurance scheme open to the population not covered by the social security schemes. Today, the PHI covers all of its intended affiliates, about 52 million peoplePublication Crime and Violence in Central America : A Development Challenge - Main Report(World Bank, 2011-01-01)Crime and violence are now a key development issue for Central American countries. In three nations El Salvador, Guatemala, and Honduras crime rates are among the top five in Latin America. This report argues that successful strategies require actions along multiple fronts, combining prevention and criminal justice reform, together with regional approaches in the areas of drug trafficking and firearms. It also argues that interventions should be evidence based, starting with a clear understanding of the risk factors involved and ending with a careful evaluation of how any planned action might affect future options. In addition, the design of national crime reduction plans and the establishment of national cross-sectoral crime commissions are important steps to coordinate the actions of different government branches, ease cross-sectoral collaboration and prioritize resource allocation. Of equal importance is the fact that national plans offer a vehicle for the involvement of civil society organizations, in which much of the expertise in violence prevention and rehabilitation resides. Prevention efforts need to be complemented by effective law enforcement. The required reforms are no longer primarily legislative in nature because all six countries have advanced toward more transparent adversarial criminal procedures. The second-generation reforms should instead help deliver on the promises of previous reforms by: (i) strengthening key institutions and improving the quality and timeliness of the services they provide to citizens; (ii) improving efficiency and effectiveness while respecting due process and human rights; (iii) ensuring accountability and addressing corruption; (iv) increasing inter-agency collaboration; and (v) improving access to justice, especially for poor and disenfranchised groups. Specific interventions reviewed in the report include: information systems and performance indicators as a prerequisite to improve inter-institutional coordination and information sharing mechanisms; an internal overhaul of court administration and case management to create rapid reaction, one-stop shops; the strengthening of entities that provide legal counseling to the poor and to women; and the promotion of alternative dispute-resolution mechanisms and the implementation of community policing programs.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Guide to the Debt Management Performance Assessment Tool(Washington, DC, 2008-02-05)The purpose of this document is to provide guidance and supplemental information to assist with country assessments of debt management performance, using the Debt Management Performance Assessment (DeMPA) tool. The DeMPA is a methodology used for assessing public debt management performance through a comprehensive set of 15 performance indicators spanning the full range of government Debt Management (DeM) functions. It is based on the principles set out in the International Monetary Fund (IMF) and World Bank guidelines for public debt management, initially published in 2001 and updated in 2003. It is modeled after the Public Expenditure and Financial Accountability (PEFA) framework for performance measurement of public financial management. The DeMPA has been designed to be a user-friendly tool to undertake an assessment of the strengths and weaknesses in government DeM practices. This guide provides additional background and supporting information so that a no specialist in the area of debt management may undertake a country assessment effectively. The guide can be used by assessors in preparing for and undertaking an assessment. It is particularly useful for understanding the rationale for the inclusion of the indicators, the scoring methodology, and the list of supporting documents or evidence required, and the questions that could be asked for the assessment.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.