Carbon Pricing

Funding Inclusive Green Transition through Greenhouse Gas Pricing

Submitted by Elin Lokrantz on 4 May 2020

2015 was a special year. During a few months the political
stars aligned and made it possible for the international
community to agree on the Agenda 2030
for Sustainable Development and the Paris Agreement
to limit global warming. Now the signatories need to
find ways to implement these agreements, which not
only imply a deep decarbonization of the economy but
must also meet the Sustainable Development Goals.
In this article we discuss the importance of pricing
greenhouse gas (GHG) emissions2 to make this happen.

Carbon Pricing, Climate Change, Policy Design

The Economics of REDD through an Incidence of Burdens and Benefits Lens

Submitted by Stephanie Scott on 28 June 2020

Forests in lower-income countries provide a global public good, carbon sequestration. REDD, "reduced emissions from deforestation and forest degradation" is a performance-based payment designed to align private incentives at the country level with the socially optimal level of forest loss. This review article focuses on the distributional implications of REDD, specifically on whom the burdens and benefits fall. First, REDD implementation has proven more difficult and costly than originally anticipated.

Carbon Pricing, Climate Change, Forestry

Measuring the net benefits of payments for hydrological services programs in Mexico

Submitted by Stephanie Scott on 28 June 2020
EfD Authors:

A number of studies show that payments for ecosystem services (PES) programs contribute to reducing deforestation, but few have measured the impact on ecosystem service provision or compared economic benefits and costs of these programs. We integrate impact evaluation and ecosystem service measurement to examine the effects of PES programs in Veracruz, Mexico. We use quasi-experimental methods to measure the effect of enrolling in PES on forest cover. We link these changes in forest cover to field-calibrated measures of water regulation and carbon storage.

Carbon Pricing, Forestry

Decarbonizing the Industrial Sector: The Potential for Ambitious EU Member States to Use Flexible Performance Standards to Strengthen Carbon Price Signals

Submitted by Elin Lokrantz on 11 May 2020

In this policy brief, we offer an introduction to the family of policy instruments known as “flexible performance standards.” We describe and examine the attributes of performance standards that elevate them to be chosen in many jurisdictions, often as a precursor to carbon pricing, and we explain why flexibility improves their cost effectiveness and the potential they may have as complementary policies to strengthen carbon pricing to drive innovation, with a specific focus on the industrial sector.

Carbon Pricing, Climate Change, Policy Design