A global uniform carbon price would be economically efficient and at the same time avoid ‘carbon-leakage’. Still, it will affect the competitiveness of specific industries, economic activity and employment across countries. This paper assesses short-term economic shocks following the introduction of a global carbon price that would be in line with the Paris Agreement. Based on the World Input-Output Database (WIOD), we trace the carbon content of final output through global supply chains.

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.