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Parallel tracks towards a global treaty on carbon pricing

Jeroen C.J.M. van den Bergh (), Arild Angelsen, Andrea Baranzini, W. J. Wouter Botzen, Stefano Carattini, Stefan Drews, Tessa Dunlop, Eric Galbraith, Elisabeth Gsottbauer, Richard B. Howarth, Emilio Padilla (), Jordi Roca and Robert Schmidt
Additional contact information
Jeroen C.J.M. van den Bergh: Universitat Autònoma de Barcelona, ICREA & VU University Amsterdam
Arild Angelsen: Norwegian University of Life Sciences
Andrea Baranzini: University of Applied Sciences Western Switzerland
W. J. Wouter Botzen: VU University Amsterdam & Utrecht University
Stefan Drews: Universitat Autònoma de Barcelona
Tessa Dunlop: Universitat Autònoma de Barcelona
Eric Galbraith: Universitat Autònoma de Barcelona & ICREA
Elisabeth Gsottbauer: University of Innsbruck
Richard B. Howarth: Dartmouth College
Jordi Roca: Universitat de Barcelona
Robert Schmidt: University of Kaiserslautern

No 2018/12, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: We argue that a global carbon price is the only way to effectively tackle free riding in international climate policy, required to substantially reduce greenhouse gas emissions. We briefly review the main reasons behind the essential role of carbon pricing, address common misunderstandings and scepticism, and identify key complementary policy instruments. Negotiating global carbon pricing is argued to be much easier than negotiating binding country-level targets, especially if it includes equitable revenue recycling. Moreover, a global carbon price can be more readily adapted to new data and insights of climate science. We propose a political strategy towards a global carbon price that consists of two tracks. The first entails assembly of a carbon-pricing club, a specific case of a climate club, to gradually move towards a full participatory agreement on carbon pricing. The second track involves putting time and energy into re-focusing UNFCCC negotiations on a carbon-pricing agreement. The two tracks reinforce one another, increasing the likelihood of a successful outcome.

Keywords: Carbon Tax; Carbon Market; Cap-and-Trade; Tradable Permits; Equity; Climate Agreement; Climate Club (search for similar items in EconPapers)
JEL-codes: Q54 Q58 Q48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-reg
Date: 2018
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