Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries

By Ian W.H. Parry, Victor Mylonas, Nate Vernon-Lin

August 30, 2018

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Ian W.H. Parry, Victor Mylonas, and Nate Vernon-Lin. Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

Following submission of greenhouse gas (GHG) mitigation commitments or pledges (by 190 countries) for the 2015 Paris Agreement, policymakers are considering specific actions for their implementation. To help guide policy, it is helpful to have a quantitative framework for understanding: i) the main impacts (on GHGs, fiscal balances, the domestic environment, economic welfare, and distributional incidence) of emissions pricing; ii) trade-offs between pricing and other (commonly used) mitigation instruments; and iii) why/to what extent needed policies and their impacts differ across countries. This paper provides an illustrative sense of this information for G20 member countries (which account for about 80 percent of global emissions) under plausible (though inevitably uncertain) projections for future fuel use and price responsiveness. Quantitative results underscore the generally strong case for (comprehensive) pricing over other instruments, its small net costs or often net benefits (when domestic environmental gains are considered), but also the potentially wide dispersion (and hence inefficiency) in emissions prices implied by countries’ mitigation commitments.

Subject: Carbon tax, Environment, Fuel prices, Fuel tax, Greenhouse gas emissions, Non-renewable resources, Prices, Taxes

Keywords: Africa, Air pollution mortality, Carbon pricing, Carbon tax, Climate mitigation, Co, Cost increase, Countries flexibility, Electricity Co, Fuel price elasticity, Fuel price response, Fuel price responsiveness, Fuel prices, Fuel tax, G20 countries, Global, Greenhouse gas emissions, Instrument choice, Monopoly price distortion, Non-renewable resources, Paris Agreement, Percent Co, Price change, Price projection, Responsiveness of emission, Road fuel price elasticity, Tax incidence, Tons Co, Welfare cost, Welfare effects, WP

Publication Details

Pages:

56
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/193
Stock No:

WPIEA2018193
ISBN:

9781484373842
ISSN:

1018-5941

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