1887

OECD Environment Working Papers

This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available.

English

The economic and environmental benefits from international co-ordination on carbon pricing

Insights from economic modelling studies

This paper assesses quantitative estimates based on economic modelling studies of the economic and environmental benefits from different forms of international co-ordination on carbon pricing. Forms of international co-ordination include: harmonising carbon prices (e.g. through linking carbon markets), extending the coverage of pricing schemes, phasing out fossil fuel subsidies, developing international sectoral agreements, and establishing co-ordination mechanisms to mitigate carbon leakage. All forms of international co-operation on carbon pricing can deliver benefits, both economic (e.g. lower mitigation costs) and/or environmental (e.g. reducing GHG emissions and carbon leakage). Benefits tend to be higher with broader participation of countries, broader coverage of emissions and sectors and more ambitious policy goals. Most, but not all, countries gain economic benefits from international co-operation, and these benefits vary significantly across countries and regions. Complementary measures outside co-operation on carbon pricing (e.g. technology transfers) could ensure that co-operation provides economic benefits for all countries.

English

Keywords: Sectoral agreements, Border carbon adjustment, Fossil fuel subsidy reforms, Harmonising carbon prices, International Co-operation, Climate change mitigation, Climate-economy-modelling
JEL: F18: International Economics / Trade / Trade and Environment; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming; Q56: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
This is a required field
Please enter a valid email address
Approval was a Success
Invalid data
An Error Occurred
Approval was partially successful, following selected items could not be processed due to error