Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries

Ian Parry, Victor Mylonas and Nate Vernon-Lin

No 2018/193, IMF Working Papers from International Monetary Fund

Abstract: Following submission of greenhouse gas (GHG) mitigation commitments or pledges (by 190 countries) for the 2015 Paris Agreement, policymakers are considering specific actions for their implementation. To help guide policy, it is helpful to have a quantitative framework for understanding: i) the main impacts (on GHGs, fiscal balances, the domestic environment, economic welfare, and distributional incidence) of emissions pricing; ii) trade-offs between pricing and other (commonly used) mitigation instruments; and iii) why/to what extent needed policies and their impacts differ across countries. This paper provides an illustrative sense of this information for G20 member countries (which account for about 80 percent of global emissions) under plausible (though inevitably uncertain) projections for future fuel use and price responsiveness. Quantitative results underscore the generally strong case for (comprehensive) pricing over other instruments, its small net costs or often net benefits (when domestic environmental gains are considered), but also the potentially wide dispersion (and hence inefficiency) in emissions prices implied by countries’ mitigation commitments.

Keywords: WP; co; electricity Co; tons Co; percent Co; road fuel price elasticity; Paris Agreement; carbon pricing; G20 countries; instrument choice; air pollution mortality; tax incidence; welfare effects; climate mitigation; fuel price elasticity; fuel price responsiveness; cost increase; monopoly price distortion; welfare cost; responsiveness of emission; countries flexibility; fuel price response; price change; price projection; Carbon tax; Greenhouse gas emissions; Non-renewable resources; Fuel prices; Fuel tax; Africa; Global (search for similar items in EconPapers)
Pages: 56
Date: 2018-08-30
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Citations: View citations in EconPapers (5)

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Journal Article: Mitigation Policies for the Paris Agreement: An Assessment for G20 Countries (2021)
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