How to Cut Methane Emissions

By Ian W.H. Parry, Simon Black, Danielle N Minnett, Victor Mylonas, Nate Vernon-Lin

October 31, 2022

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Format: Chicago

Ian W.H. Parry, Simon Black, Danielle N Minnett, Victor Mylonas, and Nate Vernon-Lin. How to Cut Methane Emissions, (USA: International Monetary Fund, 2022) accessed December 21, 2024

Summary

Limiting global warming to 1.5 to 2°C above preindustrial levels requires rapid cuts in greenhouse gas emissions. This includes methane, which has an outsized impact on temperatures. To date, 125 countries have pledged to cut global methane emissions by 30 percent by 2030. This Note provides background on methane emission sources, presents practical fiscal policy options to cut emissions, and assesses impacts. Putting a price on methane, ideally through a fee, would reduce emissions efficiently, and can be administratively straightforward for extractives industries and, in some cases, agriculture. Policies could also include revenue-neutral ‘feebates’ that use fees on dirtier polluters to subsidize cleaner producers. A $70 methane fee among large economies would align 2030 emissions with 2oC. Most cuts would be in extractives and abatement costs would be equivalent to just 0.1 percent of GDP. Costs are larger in certain developing countries, implying climate finance could be a key element of a global agreement on a minimum methane price.

Subject: Agricultural commodities, Agricultural sector, Commodities, Economic sectors, Environment, Financial crises, Greenhouse gas emissions, Natural gas sector

Keywords: Agricultural commodities, Agricultural sector, Agriculture, Border methane adjustment, Carbon pricing, Climate change mitigation, Design issues, Extractives, Global, Global Methane Pledge, Greenhouse gas emissions, IMF analysis, IMF staff Climate note, IMF staff Climate Note 2022/008, International price floor, Methane emission, Methane emissions, Methane tax, Natural gas sector

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Staff Climate Notes
Stock No:

CLNEA2022008
ISBN:

9798400224256
ISSN:

2789-0600

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