Adopting Carbon Pricing Tools at the Local Level: A City Case Study in Portugal

Lurdes Jesus Ferreira, Luís Pereira Dias and Jieling Liu
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Lurdes Jesus Ferreira: Centro de Engenharia e Desenvolvimento CEIIA, Av. D. Afonso Henriques, 1825, 4450-017 Matosinhos, Portugal
Luís Pereira Dias: CENSE—Centre for Environmental and Sustainability Research Energy and Climate, Campus de Caparica, NOVA School of Science and Technology, NOVA University Lisbon, 2829-516 Caparica, Portugal
Jieling Liu: Centro de Engenharia e Desenvolvimento CEIIA, Av. D. Afonso Henriques, 1825, 4450-017 Matosinhos, Portugal

Sustainability, 2022, vol. 14, issue 3, 1-20

Abstract: Debates on carbon costs and carbon pricing to accelerate the reduction of greenhouse gas (GHG) emissions are emerging as cities develop local policies and programs to achieve carbon neutrality. This paper focuses on how cities formulate economic instruments and adopt carbon pricing experiments to support their climate objectives. Extensive literature is available on science-policymaking interface Integrated Assessment Models (IAM) and on the two mainstream approaches of carbon cost formulation—Social Cost of Carbon (SCC) and Marginal Abatement Cost (MAC). Although, the literature on how governments develop climate policy instruments, particularly towards a local carbon cost, is recent. We start by reviewing these essential concepts and tools for carbon cost formulation. We then critically review a set of local carbon pricing experiments, totaling fourteen international cities, and confirm a great demand for scientifically robust, verifiable, and transferable carbon cost methodologies at the local level. We thus propose an approach to assess the short-term technology cost of CO 2 emission reduction in the mobility sector in Matosinhos municipality, Portugal. Our approach shows that a carbon cost methodology at the local level with robust, verifiable, and transferable results is possible. We advocate for a methodological advance to estimate versatile CO 2 prices suitable for local conditions.

Keywords: carbon pricing; climate policy; GHG emissions; local level; low-carbon mobility; cost of carbon (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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