Carbon Pricing

A growing number of jurisdictions are adopting market-based climate policies. By putting a price on carbon, these policies give businesses the incentive to innovate so they can cut emissions at the lowest possible cost.

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Cap and Trade vs. Taxes

  Cap and trade and a carbon tax are two distinct policies aimed at reducing greenhouse gas (GHG) emissions.  Each approach has its vocal supporters.  Those in favor of cap and trade argue that it is the only approach that …

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Coverage of Natural Gas Emissions & Flows Under a GHG Cap-and-Trade Program

This paper provides an overview of the different point-of-regulation options for covering greenhouse gas emissions from natural gas under a cap-and-trade program. The paper assesses the percentage of emissions covered under the different options and the type and number of entities …

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Greenhouse Gas Offsets in a Domestic Cap-and-Trade Program

This brief presents the key issues and identifies options for the incorporation of greenhouse gas (GHG) offsets into emerging U.S. climate change policy. A GHG offset represents a reduction, avoidance, destruction, or sequestration of GHG emissions from a source not …

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Scope of a Greenhouse Gas Cap-and-Trade Program

This brief describes issues involved in choosing the set of greenhouse gases (GHGs), emission sources, and sectors of the economy included in a cap-and-trade program. Trade-offs between three primary criteria determine whether a source should be included in a cap-and-trade …

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Greenhouse Gas Emissions Allowance Allocation

This policy brief outlines various options for distributing greenhouse gas emission allowances under a cap-and-trade program. Allowances represent a significant source of value and can be used to compensate firms or individuals affected by climate change policy or to raise …

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Tax Policies to Reduce Greenhouse Gas Emissions

This brief outlines the motivation for and key features of a tax designed to reduce emissions of greenhouse gases (GHGs). The two most commonly discussed market-based instruments for reducing GHG emissions are a cap-andtrade system and a GHG (carbon) tax. …

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Ensuring Offset Quality

This paper aims to provide policymakers with practical recommendations regarding the integration of greenhouse gas (GHG) offsets into emerging regulatory systems. Offsets have an important role to play in controlling the costs associated with regulating and reducing GHGs, and in …

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Paper
Economic Costs of a Market-based Climate Policy

Effort to develop a mandatory climate policy is accelerating and it seems likely that a national market-based strategy for dealing with climate change is on the near term horizon. Key provisions are likely to include a cap on selected greenhouse …

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The European Union’s Emissions Trading System in Perspective

To meet its obligations to reduce greenhouse gas (GHG) concentrations under the Kyoto Protocol, the European Union (EU) established the first cap-and-trade system for carbon dioxide emissions in the world starting in 2005. Proposed in October 2001, the EU’s Emissions …

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Economic Models Provide Insights Not Numbers

Economic models establish a logical and consistent framework for considering the implications of different policies, and have been extensively used to evaluate the consequences of different policy choices for addressing global climate change. But it is important to understand both …

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