There has been a resurgence in the debate around Carbon Border Adjustment Mechanisms (CBAMs) and the role they may play in preserving the effectiveness of climate action in high ambition countries. This report explores how the European Union’s CBAM, announced to come into force by the end of 2022, might affect the UK.
The fact that a carbon tax is an environmentally and economically efficient instrument for reducing emissions is often highlighted, but the equity story is also of importance. This paper addresses the question of the distributional burden of a carbon tax across different income groups and the role played by income inequality.
The authors of this paper devise a new strategy for social interventions designed to increase climate-friendly behaviour, testing the proclivity of attendees at a major European environmental economics conference to offset their carbon emissions from travelling to the conference.
The authors of this paper develop a theoretical model of emissions trading in the presence of transaction costs, calibrating the model to annual transactions and compliance data in the European Union emissions trading scheme over its second phase.
This brief argues that once the immediate rescue has been secured and countries move towards recovery from COVID-19, carefully implementing carbon pricing while reducing fossil fuel subsidies should be at the core of any stimulus package. read more »
Following reform of the EU emissions trading system (ETS) in 2018 further regulatory amendments are on the horizon as part of the 2021 review. This paper evaluates and compares the impacts of realistic regulatory changes within the ETS to inform the 2021 review and raise ambition, examining two main policy levers: the linear reduction factor and the market stability reserve. read more »
New reports find that a well-designed carbon tax could leave low-income households better off and drive the transition to a net-zero economy
The UK government should consider a broader-based carbon tax that is distributionally fair and consistent with net-zero greenhouse gas emissions as the current economic framework for decarbonisation in the UK … read more »
This study explores the distributional impacts of a net-zero-consistent carbon price across different household types and income deciles in the UK; and examines which combination of interventions may reduce carbon consumption and still be progressive.
This multi-disciplinary five-day course provides an in-depth overview of the economics and governance of climate change, and the risks and opportunities they present for a range of organisations. read more »
The authors of this paper show that while a convergence towards relatively high carbon prices is more than welcome from a climate perspective, central banks and other agencies responsible for financial stability may need to play close attention to such development. read more »