Carbon Pricing: Design, Experiences and Issues, edited by LarryKreiser, MikaelAndersen, BirgitteOlsen, StefanSpeck, JanetMilne and HopeAshiabor. Published by Edward Elgar Publishing, Cheltenham, UK, 2015, 256 pages. ISBN: 9781785360220, ₤75.

Carbon pricing is about the explicit pricing of greenhouse gas (GHG) emissions, of which carbon dioxide is the most important. GHG emissions, which are normally measured in tonnes of carbon dioxide equivalent units, are responsible for global warming and hence the greatest environmental externality of our age. Carbon pricing is a mechanism for making society account for the external damage caused by carbon emissions in economic decision making. There are two main ways of pricing carbon dioxide emissions, either via a carbon tax or via the introduction of an emissions trading scheme whereby those emitting carbon into the atmosphere are required to surrender permits which reflect the quantity of emissions they are responsible for. These emission permits are tradeable and hence command a price and, in some respects, operate in a similar way to a carbon tax. Thus, we will discuss both carbon pricing and emissions trading, as the literature on both is closely related. Emissions trading exists for certain other pollutants (such as sulphur dioxide) and we will discuss some of the literature related to this. However, most of the literature on emissions trading relates to carbon dioxide emissions, as these are by far the most valuable traded emissions globally. The literature on carbon pricing and emissions trading is wide ranging and constantly being updated with new analyses. Much of the literature is written by economists who are seeking to apply market-based approaches to the solution of environmental problems. The article starts by looking at the general context in which carbon pricing and emissions trading sits before discussing introductory texts which relate to the subject and going on to introduce the relevant classic literature in environmental economics. It then proceeds to more applied literature, beginning with discussions of early examples of emissions trading and carbon taxation, before continuing to studies of the impact of carbon pricing and emissions trading and those which explain the nature of the schemes we observe. The article continues with literature which looks at the Europe Union Emissions Trading Scheme (EU ETS) for GHGs and other important carbon pricing schemes. It then moves on to the literature on the prospects for a global carbon price, on interactions with other climate policies, on distributional concerns about the imposition of a price on carbon. Finally, it concludes with an introduction to relevant official publications and sources of data on carbon emissions and carbon prices.

The impact of British Columbia's carbon tax on residential natural gas consumption

This paper explores how optimizing vessel speeds can help reduce carbon emissions in the maritime industry. Focusing on liner shipping routes between China and Europe, it examines how carbon pricing mechanisms, including carbon taxes and emissions trading under the European Union Emissions Trading Scheme (EU ETS), impact operational costs and emissions reduction. With the use of advanced optimization methods, such as the Non-dominated Sorting Genetic Algorithm-II (NSGA-II) and the Technique for Order of Preference by Similarity to an Ideal Solution (TOPSIS), this research explores the balance between adjusting vessel speeds and minimizing emissions. The findings show that shipping companies on the China–Europe route can reduce the financial strain of carbon pricing by carefully managing speeds and voyage times. This study compares two scenarios of carbon tax policy and carbon trading rights in terms of voyage costs and carbon emissions. The results of this comparison based on the given parameters indicate a reduction of 1124 tons of carbon emissions with the carbon tax policy scenario, while the carbon trading rights scenario allows for more voyages yearly (5.24 vs. 5.30). This demonstrates one policy being more economical, while the other is also more environmentally efficient. These insights support the development of strategies that align environmental goals with economic priorities, paving the way for more sustainable maritime operations. The study introduces its objectives and reviews relevant literature by presenting a detailed methodology, incorporating emissions modeling with clearly defined parameters. The analysis presents results that undergo sensitivity testing and limitations using MATLAB (R2022a version). The study concludes by discussing policy implications and recommendations for future research and practical advancement

Multiple price bubbles in global major emission trading schemes: Evidence from European Union, New Zealand, South Korea and China

What explains the choice of corporate political strategy in environmental politics? Drawing on recent models of actor strategy formation in political economy, this article argues that basic material interests of firms are translated into strategies in the context of institutional environments. I advance a typological model that posits how distributional effects—positive versus negative—and perceived regulatory pressure—low versus high—interact in leading firms to adopt one of four ideal-type strategies: opposition, hedging, support, and non-participation. This article examines the model through the case of corporate strategies in the making of the European Union’s Emission Trading Scheme. The article contributes to theory-building on business strategy in environmental politics by offering a probabilistic explanatory model, and it flags hedging strategies as an increasingly prevalent form of business behavior.

Comment on “<scp>Energy‐Related</scp> Environmental Policy and Its Impacts on Energy Use in Asia”

Carbon markets devolve governance to external institutions and displace power from sovereign states. Major producers in these markets, notably China, have expressed concern about the adverse implications for national interests and sovereignty associated with selling off the rights to emit carbon emissions abroad. This article suggests that such concern has shaped the discursive context in which emission trading schemes have gained popularity in the country. Our discourse analysis shows that notions of market power are made manifest as a powerful storyline. In the Chinese language, “power,” “sovereignty,” and “rights” all use the same character. The storyline captures all these expressions and allows for a positive view about active engagement in carbon trading as a way to protect development rights and redeem carbon sovereignty. Thus, the contested policy of emissions trading becomes embedded in the more appealing narrative of national development and made politically attractive, despite unfavorable realities against it.

Carbon emissions drive climate change, and failure to reduce these emissions could lead to disastrous consequences. Countries impose carbon pricing as an instrument to reduce carbon emissions. However, carbon leakage is a counteractive mechanism where countries with higher carbon emission prices may see their sectors outsource production to countries with lower prices or lose competitiveness and market share to foreign companies with lower production costs. This study confirms that fuel excise taxes are the leading channel of carbon leakage. Structural gravity estimates show that carbon pricing based on carbon taxes and emission trading schemes (ETS) does not cause carbon leakage, but fuel excise taxes and ETS exemptions have a significant impact. This finding is supported when looking at carbon prices in different sectors. Thus, policymakers should consider adjusting fuel excise taxes accordingly.

As the evidence of global warming amounts, the demand increases for effective policy responses that can counter a dangerous rise in the global temperature. Here, we demonstrate and explain the spread of one such policy: carbon pricing. By employing the concept of policy diffusion, we show that the two carbon pricing policies – carbon taxes and emission trading schemes – have diffused as a result, not of independent policy choices in different states, but of an interdependent process of states learning from and emulating each other under the influence of international organisations. In this way, carbon pricing has transitioned from being a policy employed only by pioneer countries to becoming a global norm to which every responsible state is expected to conform.

Carbon prices: Were they an obstacle to the launching of emission abatement projects in Spain in the Kyoto Protocol period?

With the increasing global concern over climate change, reducing greenhouse gas emissions has become a universal goal for governments and enterprises. For oversize and heavyweight cargo (OHC) transportation, multimodal transportation has become widely adopted. However, this mode inevitably generates carbon emissions, making research into effective emission reduction strategies essential for achieving low-carbon economic development. This study investigates the optimization of multimodal transportation paths for OHC (OMTP-OHC), considering various direct carbon pricing policies and develops models for these paths under the ordinary scenario—defined as scenarios without any carbon pricing policies—and two carbon pricing policy scenarios, namely the emission trading scheme (ETS) policy and the carbon tax policy, to identify the most cost-effective solutions. An enhanced genetic algorithm incorporating elite strategy and catastrophe theory is employed to solve the models under the three scenarios. Subsequently, we examine the impact of ETS policy price fluctuations, carbon quota factors, and different carbon tax levels on decision-making through a case study, confirming the feasibility of the proposed model and algorithm. The findings indicate that the proposed algorithm effectively addresses this problem. Moreover, the algorithm demonstrates a small impact of ETS policy price fluctuations on outcomes and a slightly low sensitivity to carbon quota factors. This may be attributed to the relatively low ETS policy prices and the characteristics of OHC, where transportation and modification costs are significantly higher than carbon emission costs. Additionally, a comparative analysis of the two carbon pricing policies demonstrates the varying intensities of emission reductions in multimodal transportation, with the ranking of carbon emission reduction intensity as follows: upper-intermediate level of carbon tax &gt; intermediate level of carbon tax &gt; lower-intermediate level of carbon tax = ETS policy &gt; the ordinary scenario. The emission reduction at the lower-intermediate carbon tax level (USD 8.40/t) matches that of the ETS policy at 30%, with a 49.59% greater reduction at the intermediate level (USD 50.48/t) compared to the ordinary scenario, and a 70.07% reduction at the upper-intermediate level (USD 91.14/t). The model and algorithm proposed in this study can provide scientific and technical support to realize the low-carbonization of the multimodal transportation for OHC. The findings of this study also provide scientific evidence for understanding the situation of multimodal transportation for OHC under China’s ETS policy and its performance under different carbon tax levels in China and other regions. This also contributes to achieving the goal of low-carbon economic development.

This paper investigates the interaction between economic, technological, and operational measures intended to reduce air transport-related emissions of carbon dioxide (CO2). In particular, the introduction of aviation to the European Union Emissions Trading Scheme (ETS) in 2012 may prompt increased uptake of presently available options for emission reduction (e.g., retrofitting winglets, expanding maintenance programs) by airlines operating in Europe. Carbon prices may also determine the use of options currently under development [e.g., open-rotor engines, second-generation biofuels, and improved air traffic management (ATM)]. The results of a several studies analyzing airline costs and emission reductions that are possible from different mitigation options are applied to a systems model of European aviation. With a set of nine scenarios (three internally consistent projections for future population, gross domestic product, oil and carbon prices, each run with three policy cases), technology uptake and the resulting effect on fuel life cycle CO2 emissions with and without an ETS are analyzed. Some options are rapidly taken up under all scenarios (e.g., improved ATM), others are taken up more slowly by specific aircraft classes depending on the scenario (e.g., biofuels), and others have negligible impact in the cases studied. High uptake of one mitigation option may also reduce the uptake of other options. European aviation fuel life cycle emissions could be reduced below 2005 levels before 2050 if cellulosic biomass fuels are made available by 2020. However, the land use requirements in this scenario may limit its practicality at currently projected cellulosic biomass yields.

Refining the Evidence: British Columbia's Carbon Tax and Household Gasoline Consumption

This paper investigates how carbon prices influence the financial market value of the individual firm after Phase I of the EU's Emission Trading Scheme (ETS). The dataset covers 136 firms in the industries that are responsible for the majority of the greenhouse gas emission, namely the oil and gas, power and heat, cement and lime, and iron and steel industry. The paper basically follows the method and approach applied in Oberndorfer [27]. The results show there is a positive and significant effect of carbon price changes on stock market returns in all four industries. Furthermore, there is evidence for an asymmetric influence in all sectors apart from the oil & gas industry. Volatility of the market value of firms appears not be influenced by the volatility of the EU ETS carbon prices. The results appear to be robust against different specifications for the estimation of the variance. However, they are sensitive to different time periods, i.e., distinguishing between 2008-2009 and 2010-2011. We conclude that despite several inefficiencies, the EU ETS has a significant impact on the value of firms that are responsible for most of the carbon emissions in the EU.

Close the carbon loophole