Environmental policy tools and evaluation


Effective Carbon Prices

Economic textbooks predict that taxes and emission trading systems are the cheapest way for societies to reduce emissions of CO2. This book shows that this is also the case in the real world. It estimates the costs to society of reducing CO2 emissions in 15 countries using a broad range of policy instruments in 5 of the sectors that generate most emissions: electricity generation, road transport, pulp & paper and cement, as well as households’ domestic energy use. It finds wide variations in the costs of abating each tonne of CO2 within and among countries, as well as in the sectors examined and across different types of policy instruments. Market-based approaches like taxes and trading systems consistently reduced CO2 at a lower cost than other instruments. Capital subsidies and feed-in tariffs were among the most expensive ways of reducing emissions.

Published on November 04, 2013Also available in: French

SUMMARIESavailable in 5 languages

English Effective Carbon Prices (Summary in English)
Spanish Precios efectivos del carbono
German Effective Carbon Prices (Summary in German)
Japanese Effective Carbon Prices (Summary in Japanese)
Italian Effective Carbon Prices (Summary in Italian)


Executive summary
Methodologies for estimating effective carbon prices
OECD's approach to estimate effective carbon prices
Estimated effective carbon prices
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