Searching for carbon leaks in multinational companies
This paper examines whether the European Union Emissions Trading System (EU ETS) has led companies to shift the location of production, thereby creating carbon leakage.
Topic: Carbon pricing and markets
Do carbon offsets offset carbon?
In this paper the authors develop and implement a new method for identifying ‘wasted’ subsidies, and use it to provide systematic evidence on the misallocation of carbon offsets in the Clean Development Mechanism, the world’s largest carbon offset programme.
What does an EU Carbon Border Adjustment Mechanism mean for the UK?
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 distributional effects of a carbon tax: The role of income inequality
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.
Nudging when the descriptive norm is low: Evidence from a carbon offsetting field experiment
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.
Emissions trading with transaction costs
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.
Pricing carbon during the economic recovery from the COVID-19 pandemic
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 »
Using supply-side policies to raise ambition: the case of the EU ETS and the 2021 review
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 »
Distributional impacts of a carbon tax in the UK
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.