The price of carbon: Choosing between the physical and economic equivalence of emissions and permits

V. V. Karginova-Gubinova (), O. V. Tolstogyzov (), S. V. Tishkov () and E. A. Shlapeko ()

Voprosy Ekonomiki, 2025, issue 7

Abstract: Carrying out decarbonization of the economy requires a mechanism for determining the price of carbon. The work is built on the data of the world’s leading studies, statistical and exchange indicators, that are analyzed using the methods of descriptive statistics and integral equations. The features of carbon as an external effect are highlighted, which, in comparison with standard exchange assets, to a greater extent limit the possibility of setting a price for it in the course of negotiations and bargaining (the Coase theorem). The incompatibility of ensuring physical equivalence of emitted and stored carbon with economic equivalence, taking into account time preferences, is shown. The method for determining the price of carbon is proposed to achieve a balance of interests between current and future generations, taking into account differences among countries and emitted greenhouse gases. This method was tested for Russia. The criteria and mechanisms of carbon pricing as an external effect, keeping in mind its highlighted features, are put forward. Measures aimed at maximizing the effect of decarbonization of the economy are proposed.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:nos:voprec:y:2025:id:5388

DOI: 10.32609/0042-8736-2025-7-82-97

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