Carbon Pricing Impacts on Four Pollutants: A Cross-Country Analysis

Rohan Best (), Fatemeh Nazifi and Han Cheng
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Rohan Best: Department of Economics, Macquarie University, 4 Eastern Road, Sydney 2109, Australia
Fatemeh Nazifi: Department of Economics, Macquarie University, 4 Eastern Road, Sydney 2109, Australia
Han Cheng: Department of Economics, Macquarie University, 4 Eastern Road, Sydney 2109, Australia

Energies, 2024, vol. 17, issue 11, 1-18

Abstract: Research on climate change mitigation has increasingly considered carbon pricing, with these efforts concentrating on reductions in carbon dioxide (CO 2 ) emissions. Our comprehensive cross-country analysis extends this focus by quantitatively evaluating the effects of carbon pricing on four major pollutants: CO 2 , nitrous oxide (N 2 O), methane (CH 4 ), and particulate matter (PM). We use regressions and introduce entropy balancing to this research area. Analyzing data from 132 countries from 1992 to 2019, we find that carbon pricing is associated with an average annual reduction in CO 2 emissions by 3 percentage points. A one-unit increase in a coverage-weighted carbon price is associated with reductions in N 2 O emissions by approximately 0.1 percentage points. A shorter panel for 2010–2017 shows a larger impact of 0.3 percentage points for PM. These findings underline the efficacy of carbon pricing not just in curtailing CO 2 but in significantly mitigating other harmful pollutants on a global scale. Reductions in pollutants beyond CO 2 provide further motivation for policymakers to pursue carbon pricing.

Keywords: carbon price; co-benefit; cross country; greenhouse gas; air pollution; methane (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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