B. Knopf; K. Burghaus; C. Flachsland; M. Jakob; N. Koch; O. Edenhofer

Shifting Paradigms in Carbon Pricing

in Intereconomics, 07.06.2018

Sonstige , Director , Task Force Public Economics , Governance , Sustainable Resource Management and Global Change

Carbon pricing is essential to achieve a reduction in global CO2 emissions. A carbon price can either be set directly via a carbon tax (price control) or be achieved through a cap-and-trade system (quantity control). While there has been much debate about the relative merits of each approach, cap-and-trade systems have been favoured in the political arena. In principle, they offer the most straightforward way to achieve a country’s emission reduction target by simply setting the cap at the remaining emission budget. Existing emissions trading schemes (ETSs) can be found in Europe, California and Québec, for example.