Proposal for an International Carbon Price Floor Among Large Emitters
Ian Parry, Simon Black, James Roaf
Countries are increasingly committing to midcentury 'net-zero' emissions targets under the Paris Agreement, but limiting global warming to 1.5 to 2 degree C requires cutting emissions by a quarter to a half in this decade. Making sufficient progress to stabilizing the climate therefore requires ratcheting up near-term mitigation action but doing so among 195 parties simultaneously is proving challenging. Reinforcing the Paris Agreement with an international carbon price floor (ICPF) could jump-start emissions reductions through substantive policy action, while circumventing emerging pressure for border carbon adjustments. The ICPF has two elements: (1) a small number of key large-emitting countries, and (2) the minimum carbon price each commits to implement. The arrangement can be pragmatically designed to accommodate equity considerations and emissions-equivalent alternatives to carbon pricing. The paper discusses the rationale for an ICPF, considers design issues, compares it with alternative global regimes, and quantifies its impacts
Year of publication: |
2021
|
---|---|
Authors: | Parry, Ian |
Other Persons: | Black, Simon (contributor) ; Roaf, James (contributor) |
Publisher: |
Washington, D.C : International Monetary Fund |
Saved in:
freely available
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