Expert Recommendations on Designing Carbon Pricing Policies Across the Globe

26 Pages Posted: 13 Feb 2024

See all articles by Frikk Nesje

Frikk Nesje

University of Copenhagen - Department of Economics

Robert C Schmidt

FernUniversität in Hagen

Moritz A. Drupp

University of Hamburg - Faculty of Business, Economics, and Social Sciences

Abstract

This study presents a large-scale, global assessment of expert recommendations on key policy design options for implementing carbon pricing schemes at a country level. Based on a survey of more than 400 experts on carbon pricing, we find that almost twice as many favor a carbon tax over a cap-and-trade scheme for unilateral carbon pricing, and three-quarters strongly recommend using border carbon adjustment to address competitiveness concerns. By contrast, guidance on revenue-use from carbon pricing is much more nuanced, with considerably lower support for lump-sum transfers to households than reflected in academic and policy discussions. Furthermore, recommendations on instrument choice and revenue use vary with country- and expert characteristics, such as GDP per capita and academic discipline. Our findings can guide practitioners and researchers in the search for suitable policy approaches that combine environmental effectiveness with economic efficiency and fairness considerations.

Keywords: Carbon pricing, expert survey, instrument choice, border carbon adjustment, revenue recycling.

Suggested Citation

Nesje, Frikk and Schmidt, Robert C and Drupp, Moritz A., Expert Recommendations on Designing Carbon Pricing Policies Across the Globe. Available at SSRN: https://ssrn.com/abstract=4724175 or http://dx.doi.org/10.2139/ssrn.4724175

Frikk Nesje (Contact Author)

University of Copenhagen - Department of Economics ( email )

Øster Farimagsgade 5, Bygn 26
Copenhagen, 1353
Denmark

Robert C Schmidt

FernUniversität in Hagen ( email )

Universitätsstrasse 41
Feithstrathe 140
Hagen, 58084
Germany

Moritz A. Drupp

University of Hamburg - Faculty of Business, Economics, and Social Sciences ( email )

Von-Melle-Park 9
Hamburg, 20146
Germany

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