fbpx The Cost-effectiveness Implications of Carbon Price Certainty | Harvard Kennedy School

HKS Affiliated Authors


2020, Paper, "One hundred years ago, Professor Arthur C. Pigou published his key insight that taxing a negative technological externality would improve social welfare. This has motivated research and policy efforts in pricing pollution—directly through emissions taxes and implicitly through pollution markets such as  cap-and-trade programs and tradable performance standards (Aldy et al. 2010). To combat climate change, national and subnational governments around the world have implemented pollution markets (primarily  cap-and-trade programs) covering about 15 percent of global carbon dioxide ( C O 2   ) emissions and carbon taxes on another 5 percent of these emissions (World Bank and Ecofys 2018)."