The role of carbon pricing in transforming pathways to reach net zero emissions: Insights from current experiences and potential application to food systems

Sofie Errendal, Jane Ellis and Sirini Jeudy-Hugo

No 220, OECD Environment Working Papers from OECD Publishing

Abstract: This paper investigates the potential role and contribution of carbon pricing in transforming emission pathways towards net zero GHG emissions. It reviews carbon pricing’s impacts, overall and in the electricity sector in selected jurisdictions to date. The paper also analyses the current and potential application of emissions pricing (e.g. emissions trading schemes or carbon taxes) in food systems. The analysis finds that carbon pricing could contribute to net zero pathways alongside other policies, yet price levels and coverage to date have been too low to reduce emissions in line with the Paris Agreement’s goals. Carbon pricing’s contribution to net zero pathways could be further strengthened, including by incentivising demand-side shifts, sequencing policies and enhancing international carbon pricing collaboration. Applying emissions pricing in food systems faces significant short-term technical, methodological, and political barriers and could have just transition implications but reducing emissions from food systems could also lead to many co-benefits.

Keywords: agriculture; carbon pricing; carbon tax; climate change; climate mitigation; demand-side; emissions trading system; ETS; food systems; greenhouse gas emissions; just transition; net zero; policy packages; revenue recycling; supply-side; transformative change (search for similar items in EconPapers)
JEL-codes: H23 Q52 Q54 Q56 Q58 (search for similar items in EconPapers)
Date: 2023-06-29
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
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Persistent link: https://EconPapers.repec.org/RePEc:oec:envaaa:220-en

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