The role of carbon pricing in transforming pathways to reach net zero emissions

This paper investigates the potential role and contribution of carbon pricing in transforming emission pathways towards net zero GHG emissions. It reviews carbon pricing’s impacts, overall and in the electricity sector in selected jurisdictions to date. The paper also analyses the current and potent...

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Bibliographic Details
Published in:OECD environment working papers 2023-06
Main Authors: Errendal, Sofie, Ellis, Jane, Jeudy-Hugo, Sirini
Format: Article
Language:English
Subjects:
Carbon
Climate change
Collaboration
Emissions control
Emissions trading
Environmental tax
Food
Food systems
Greenhouse gases
Jurisdiction
Net zero
Paris Agreement
Policies
Pricing
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Summary:This paper investigates the potential role and contribution of carbon pricing in transforming emission pathways towards net zero GHG emissions. It reviews carbon pricing’s impacts, overall and in the electricity sector in selected jurisdictions to date. The paper also analyses the current and potential application of emissions pricing (e.g. emissions trading schemes or carbon taxes) in food systems. The analysis finds that carbon pricing could contribute to net zero pathways alongside other policies, yet price levels and coverage to date have been too low to reduce emissions in line with the Paris Agreement’s goals. Carbon pricing’s contribution to net zero pathways could be further strengthened, including by incentivising demand-side shifts, sequencing policies and enhancing international carbon pricing collaboration. Applying emissions pricing in food systems faces significant short-term technical, methodological, and political barriers and could have just transition implications but reducing emissions from food systems could also lead to many co-benefits.
ISSN:1997-0900
DOI:10.1787/5cefdf8c-en