Carbon pricing and COVID-19
Policy changes, challenges and design options in OECD and G20 countries
This paper assesses the role of carbon pricing in a sustainable recovery from COVID-19.
It tracks the policy changes in carbon pricing within OECD and G20 countries between
January 2020 and August 2021 of the COVID-19 pandemic. Carbon pricing as defined here
includes emissions trading schemes, fossil fuel support and carbon, fuel excise or
aviation taxes. The paper also highlights the need for the recovery to be sustainable
and discusses the advantages, limitations and uses of carbon pricing therein. In addition,
it describes additional challenges to as well as increased rationale for carbon pricing
in the pandemic. It provides evidence on the effects of carbon pricing on the challenges
and discusses carbon pricing design elements to help overcome those challenges. The
paper concludes that there were more policy changes with an expected negative impact
on climate. However, it is likely that the impact of the climate-positive changes
– which are broader in coverage and scope - will outweigh the climate-negative changes.
Published on March 10, 2022
In series:OECD Environment Working Papersview more titles