TY - JOUR A1 - Lilliestam, Johan A1 - Patt, Anthony A1 - Bersalli, German T1 - The effect of carbon pricing on technological change for full energy decarbonization BT - a review of empirical ex-post evidence JF - Wiley interdisciplinary reviews : Climate change N2 - In order to achieve the temperature goals of the Paris Agreement, the world must reach net-zero carbon emissions around mid-century, which calls for an entirely new energy system. Carbon pricing, in the shape of taxes or emissions trading schemes, is often seen as the main, or only, necessary climate policy instrument, based on theoretical expectations that this would promote innovation and diffusion of the new technologies necessary for full decarbonization. Here, we review the empirical knowledge available in academic ex-post analyses of the effectiveness of existing, comparatively high-price carbon pricing schemes in the European Union, New Zealand, British Columbia, and the Nordic countries. Some articles find short-term operational effects, especially fuel switching in existing assets, but no article finds mentionable effects on technological change. Critically, all articles examining the effects on zero-carbon investment found that existing carbon pricing scheme have had no effect at all. We conclude that the effectiveness of carbon pricing in stimulating innovation and zero-carbon investment remains a theoretical argument. So far, there is no empirical evidence of its effectiveness in promoting the technological change necessary for full decarbonization. This article is categorized under: Climate Economics > Economics of Mitigation KW - carbon pricing KW - climate policy KW - decarbonization KW - technological change Y1 - 2020 U6 - https://doi.org/10.1002/wcc.681 SN - 1757-7780 SN - 1757-7799 VL - 12 IS - 1 PB - Wiley CY - Hoboken ER - TY - RPRT A1 - Franks, Max A1 - Kalkuhl, Matthias A1 - Lessmann, Kai T1 - Optimal Pricing for Carbon Dioxide Removal Under Inter-Regional Leakage T2 - CEPA Discussion Papers N2 - Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best subsidies for CDR when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage, terms-of-trade and fossil resource rent dynamics. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, terms-of-trade effects exacerbate this wedge for net resource exporters, implying even larger removal subsidies. Third, the optimal removal subsidy may fall below the carbon tax for resource-poor countries when marginal environmental damages are small. T3 - CEPA Discussion Papers - 43 KW - carbon pricing KW - trade KW - unilateral climate policy KW - terms-of-trade effects KW - removal subsidies Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-538080 SN - 2628-653X IS - 43 ER - TY - GEN A1 - Dorband, Ira Irina A1 - Jakob, Michael A1 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph T1 - Poverty and distributional effects of carbon pricing in low- and middle- income countries BT - a global comparative analysis T2 - Postprints der Universität Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe N2 - Even though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing, the existing literature reveals ambiguous results. For this reason, we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. Building on a consistent dataset and method, we find that for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD) carbon pricing has, on average, progressive distributional effects. We also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy, rather than of food, goods or services. We argue that an inverse U-shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income. Since these countries are likely to have more financial resources and institutional capacities to deal with distributional issues, our findings suggest that mitigating climate change, raising domestic revenue and reducing economic inequality are not mutually exclusive, even in low- and middle-income countries. T3 - Zweitveröffentlichungen der Universität Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe - 103 KW - carbon pricing KW - distributional effect KW - decomposition analysis KW - global comparison KW - household data KW - low- and middle-income countries Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-424592 SN - 1867-5808 IS - 103 ER -