Assessing the role of carbon pricing in global climate change mitigation strategies

Abstract

Carbon pricing has emerged as a crucial policy tool in global efforts to mitigate climate change by internalizing the costs of carbon emissions and incentivizing emission reductions. This review provides an assessment of the role of carbon pricing in global climate change mitigation strategies. Carbon pricing mechanisms, including carbon taxes and emissions trading systems (ETS), have gained traction worldwide as governments seek effective ways to reduce greenhouse gas emissions. These mechanisms establish a price on carbon emissions, creating economic incentives for businesses and individuals to reduce their carbon footprint. The effectiveness of carbon pricing in mitigating climate change depends on various factors, including the stringency of pricing mechanisms, coverage of sectors and gases, and complementary policies and measures. Studies have shown that well-designed carbon pricing policies can lead to significant emission reductions while promoting innovation and investment in clean technologies. However, carbon pricing also faces challenges and limitations, including concerns about equity, competitiveness, and political acceptability. Distributional impacts on vulnerable populations and energy-intensive industries must be carefully addressed to ensure the fairness and effectiveness of carbon pricing policies. Furthermore, the success of carbon pricing depends on international cooperation and coordination, as emissions can easily shift across borders in response to pricing disparities. Global efforts to harmonize carbon pricing mechanisms and establish international carbon markets can enhance the effectiveness and efficiency of mitigation efforts. In conclusion, carbon pricing plays a crucial role in global climate change mitigation strategies by aligning economic incentives with environmental objectives. While it offers significant potential for reducing emissions and fostering the transition to a low-carbon economy, addressing challenges such as equity concerns and promoting international cooperation is essential for maximizing its effectiveness. By integrating carbon pricing into comprehensive climate policy frameworks, policymakers can accelerate progress towards a sustainable and resilient future.