The green transformation will have far-reaching socio-economic implications. Action is needed to ensure domestic and international social equity and fairness.
Rapid emission cuts need a carbon price for the whole economy. This must be introduced in careful stages.
Policymakers must address the need to displace carbon-intensive hydrogen with low-carbon hydrogen, and incentivise the uptake of hydrogen as a means to decarbonise sectors with hard-to-reduce emissions.
If the three biggest economies agree a carbon tax on imports, it will catalyse climate action globally.
Disclosures and financial regulation don’t get enough respect as tools to reduce emissions.
Which role carbon pricing could and should play in the future policy mix?
Putting carbon pricing at the centre of the EU climate policy architecture would provide major benefits. Obtaining these benefits requires a uniform, credible and durable carbon price – the economic first-best solution, however, several preconditions required to attain this solution are not yet met. This paper proposes a sequenced approach to ensure convergence of the policy mix on the first-best in the long run.
How to make the European Green Deal succeed.
As the European Union sets out a more ambitious climate policy, carbon price floors provide an opportunity to place greater emphasis on altering expectations, so that market agents anticipate today higher future pay-offs from low-carbon investment.
Join us in conversation with Sir Partha Dasgupta and Frans Timmermans to mark the publication of The Economics of Biodiversity: The Dasgupta Review
“We are not going to lead our society to a low-carbon economy by continuing to finance the status quo. “