Expert Recommendations on Designing Carbon Pricing Policies Across the Globe

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.