A dual-track transition to global carbon pricing: nice idea, but doomed to fail

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Notes

1 There are minor differences between the two sources due, for example, to whether taxes on fluorinated gases are included. Canada has multiple national, provincial and territorial taxes and ETSs.

2 Market stability reserves, now part of many ETSs, mitigate the impacts of policy overlap, but the effectiveness of these mechanisms has not yet been assessed.

3 Implicit carbon prices – the cost per ton of emissions reduced by non-price policies – likely will vary even more.

4 The few carbon taxes that apply to EITE sources tax all emissions, but could be designed to apply only to emissions in excess of an output-based emissions allocation.

5 Such schedules are desirable because they reduce uncertainty for mitigation investments. The ‘gilets jaune’ protests in France were initially triggered by a scheduled carbon tax rate increase. The scheduled rate increases for the UK’s carbon floor price were suspended in 2016.