International and national climate policies for aviation: a review

Aviation constitutes about 2.5% of all energy-related CO₂ emissions and in addition there are non-CO₂ effects. In 2016, the ICAO decided to implement a Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and in 2017 the EU decided on faster emission reductions in its Emissions Trading System (EU ETS), which since 2012 includes the aviation sector. The effects of these policies on the expected development of air travel emissions from 2017 to 2030 have been analyzed. For the sample country Sweden, the analysis shows that when emissions reductions in other sectors are attributed to the aviation sector as a result of the EU ETS and CORSIA, carbon emissions are expected to reduce by ?0.8% per year (however if non-CO₂ emissions are included in the analysis, then emissions will increase). This is much less than what is needed to achieve the 2°C target. Our analysis of potential national aviation policy instruments shows that there are legally feasible options that could mitigate emissions in addition to the EU ETS and CORSIA. Distance-based air passenger taxes are common among EU Member States and through increased ticket prices these taxes can reduce demand for air travel and thus reduce emissions. Tax on jet fuel is an option for domestic aviation and for international aviation if bilateral agreements are concluded. A quota obligation for biofuels is a third option.

Key policy insights

• Existing international climate policies for aviation will not deliver any major emission reductions.

• Policymakers who want to significantly push the aviation sector to contribute to meeting the 2°C target need to work towards putting in place tougher international policy instruments in the long term, and simultaneously implement temporary national policy instruments in the near-term.

• Distance-based air passenger taxes, carbon taxes on jet fuel and quota obligations for biofuels are available national policy options; if they are gradually increased, and harmonized with other countries, they can help to significantly reduce emissions.

     

China's carbon emissions and international trade: implications for post-2012 policy

Growing international trade has been one of the most important drivers for China's recent economic growth. This growth has fed rapid increases in energy demand and carbon emissions since 2000. China is now the world's largest emitter of carbon dioxide. There is mounting pressure from some in the international community for China to take specific actions to mitigate its emissions as part of a post-2012 climate regime. However, emissions embodied in internationally traded goods have not been given enough attention in this debate. This article discusses the results of research to quantify the emissions stemming from goods that are exported from China to other countries. It finds that these emissions accounted for 23% of China's national total in 2004. The article sets out how this result has been obtained and compares it to the results of several other pieces of research to demonstrate the importance of this issue. Some pointers for international climate policy are then discussed, including the advantages and difficulties of moving to consumption-based emissions accounting, and implications for international trade rules.     

Social safety nets and US climate policy costs

The debate surrounding US climate policy has been strongly influenced by concerns about the impact that placing a price on GHG emissions could have on potentially vulnerable populations, including senior citizens. This article shows that seniors would be one of the best protected groups under the climate policies recently debated in the US Congress. Moreover, low-income groups would also be protected generally under these proposals. This is due to a combination of existing government transfer programmes that automatically adjust benefit payments to account for inflation and provisions in the proposals.     

The (ir)relevance of transaction costs in climate policy instrument choice: an analysis of the EU and the US

This article assesses the relevance of ex post transaction costs in the choice of climate policy instruments in the EU (focusing mainly on the example of Germany) and the US. It reviews all publicly available empirical ex post transaction cost studies of climate policy instruments broken down by the main private and public sector cost factors and offers hypotheses on how these factors may scale depending on instrument design and other contextual factors. The key finding from the evaluated schemes is that it is possible to reject the hypothesis that asymmetries in ex post transaction costs across instruments are large and, thus, play a pivotal role in climate policy instrument choice. Both total and relative ex post transaction costs can be considered low. This conjecture differs from the experience in other areas of environmental policy instruments where high total transaction costs are considered to be important factors in the overall assessment of optimal environmental policy choice. Against this background, the main claim of this article is that in climate policy instrument choice, ex post transaction cost considerations play a minor role in large countries that feature similar institutional characteristics as the EU and the US. Rather, the focus should be on the efficiency properties of instruments for incentivizing abatement, as well as equity and political economy considerations (and other societally relevant objectives). In order to inform transaction cost considerations in climate policy instrument choice in countries that adopt new climate policies, more data would be desirable in order to enable more robust estimates of design- and context-specific transaction-cost scaling factors.

Policy relevance

The findings of this study can help inform policy makers who plan to set up novel climate policy instruments. The results indicate that ex post transaction costs play a minor role for large countries that feature similar institutional characteristics as the EU and the US. For instrument design the focus should rather be on efficiency properties of instruments in incentivizing abatement, as well as equity and political economy considerations (and other societally relevant objectives).     

Perceived fairness and public acceptability of carbon pricing: a review of the literature

While carbon pricing is widely seen as a crucial element of climate policy and has been implemented in many countries, it also has met with strong resistance. We provide a comprehensive overview of public perceptions of the fairness of carbon pricing and how these affect policy acceptability. To this end, we review evidence from empirical studies on how individuals judge personal, distributional and procedural aspects of carbon taxes and cap-and-trade. In addition, we examine preferences for particular redistributive and other uses of revenues generated by carbon pricing and their role in instrument acceptability. Our results indicate a high concern over distributional effects, particularly in relation to policy impacts on poor people, in turn reducing policy acceptability. In addition, people show little trust in the capacities of governments to put the revenues of carbon pricing to good use. Somewhat surprisingly, most studies do not indicate clear public preferences for using revenues to ensure fairer policy outcomes, notably by reducing its regressive effects. Instead, many people prefer using revenues for ‘environmental projects’ of various kinds. We end by providing recommendations for improving public acceptability of carbon pricing. One suggestion to increase policy acceptability is combining the redistribution of revenue to vulnerable groups with the funding for environmental projects, such as on renewable energy.

Key policy insights

• If people perceive carbon pricing instruments as fair, this increases policy acceptability and support.

• People’s satisfaction with information provided by the government about the policy instrument increases acceptability.

• While people express high concern over uneven distribution of the policy burden, they often prefer using carbon pricing revenues for environmental projects instead of compensation for inequitable outcomes.

• Recent studies find that people’s preferences shift to using revenues for making policy fairer if they better understand the functioning of carbon pricing, notably that relatively high prices of CO₂-intensive goods and services reduce their consumption.

• Combining the redistribution of revenue to support both vulnerable groups and environmental projects, such as on renewable energy, seems to most increase policy acceptability.

     

Beyond carbon pricing: policy levers for negative emissions technologies

This paper explores policies for Negative Emissions Technologies (NETs), in an attempt to move beyond the supply-side focus of the majority of NETs research, as well as the current dominance of carbon pricing as the main NETs policy proposal. The paper identifies a number of existing policies from four key areas – energy/transport, agriculture, sub-soil, and oceans – which will have an impact on three NETs: Bioenergy with Carbon Capture and Storage (BECCS), Direct Air Capture (DAC), and terrestrial Enhanced Rock Weathering (ERW). We propose that non-climate co-benefits may be valuable in terms of the policy ‘demand pull’ for NETs; in particular, we find that ERW may provide multiple co-benefits which can be mandated through existing policy structures. However, interaction with numerous policy areas may also create barriers, particularly where there is tension between the priorities of different government departments. On the basis of existing and analogous policies from a range of geographical contexts and scales, this paper proposes four options for NETs policy that could be reasonably implemented in the near-term. We also argue that ERW demonstrates the importance of scale and framing, because the policy environment depends on whether it is framed as a soil amendment at local scales or as a climate stabilization technique at international scale.

Key policy insights

• Co-benefits may assist the ‘demand pull’ for novel technologies by providing multiple policy angles for incentivisation rather than relying on a ‘fix-all’ policy such as a high carbon price.

• DAC with storage might be overly reliant on a high carbon price, because it only provides one core benefit – that of atmospheric carbon reduction.

• ERW may provide multiple co-benefits which can be mandated through existing policy structures, but should focus on using waste rock rather than mining virgin material.

• We propose four near-term options for NETs policy: funding for small-scale BECCS demonstration and an international biomass certification mechanism; small-scale loans for ERW on farms and promotion of locally-sourced rock residues; amendment of fertilizer subsidy schemes to include silicate rock; and a clearer framework for licensing sub-soil access for CO₂ storage.

     

Assessing the authenticity of national carbon prices: A comparison of 31 countries

Many countries have carbon pricing in place, in the form of a tax and/or market. Generally, this involves low price rates, incomplete emissions coverage, and price reductions for particular sectors. This raises the question whether the label “carbon price” – in the environmental-economics textbook sense – really applies. To answer it, we assess the authenticity of 31 national carbon prices, calculating average carbon prices and their gap with advertised prices, at both national and sector levels. The results indicate a poor level of authenticity. This means that the carbon prices published by sources such as the World Bank provide a misleading representation of the actual national policy pressure on emissions. Countries show considerable differences regarding the average carbon price level and the gap with advertised prices. Moreover, there is not a one-to-one relationship between advertised and average carbon prices, suggesting the former are not a good basis for international comparison of policy effectiveness. Across countries, the mean carbon price equals €7.90/ton of CO₂ while the mean price gap is 57.7%. Most noticeably, the highest advertised price for Sweden should be interpreted with care as it goes along with a price gap of almost €100 to the average price. In addition, Switzerland and Finland show relatively high price gaps. To illustrate the relevance and non-triviality of our indicators, note that Sweden occupies a 3rd position in terms of average carbon price (after Norway and Switzerland), 27th in terms of price gap, and 16th in terms of effective rate (i.e. sum of implicit and explicit carbon prices). We further find that implicit carbon prices dominate explicit ones for most countries, notably in road transport, whereas the reverse holds for industrial and electricity sectors. Combining our findings with recent empirical evidence for carbon-pricing effectiveness highlights the potential of the instrument to combat climate change, provided implementation is improved and internationally harmonized. Shifting the attention from advertised to average carbon prices might help in this regard.     

Challenges in developing effective policy for soil carbon sequestration: perspectives on additionality,leakage, and permanence

If carbon sequestration is to be a cost-effective substitute for reducing emissions then it must occur under a framework that ensures that the sequestration is additional to what would otherwise have occurred, the carbon is stored permanently, and any leakage is properly accounted for. We discuss significant challenges in meeting these requirements, including some not previously recognized. Although we focus on sequestration in soil, many of the issues covered are applicable to all types of sequestration. The common-practice method for determining additionality achieves its intention of reducing transaction costs in the short term but not in the medium to long term. Its design results in the least costly, additional abatement-measures being excluded from policy support and fails to address how, in the case of sequestration, revisions to the additionality of sequestering practices should apply not just to the future, but in theory, also retrospectively. Permanence is sometimes approximated as 100 years of sequestration. Re-release of sequestered carbon after this will not only reverse the sequestration, but may raise atmospheric carbon to higher levels than they would have been if the sequestration had never occurred. Leakage associated with sequestration practices can accumulate over time to exceed the total level of sequestration; nonetheless, adoption of such practices can be attractive to landholders, even when they are required to pay for this leakage at contemporary prices.

Policy relevance

Globally, much has been written and claimed about the ability to offset emissions with sequestration. The Australian Government plans to use sequestration to source much of the abatement required to reach its emissions targets. Designing effective policy for sequestration will be challenging politically, and will involve substantial transaction costs. Compromises in policy design intended to make sequestration attractive and reduce transaction costs can render it highly inefficient as a policy.     

How to reach an elusive INDC target: macro-economic implications of carbon taxation and emissions trading in Turkey

This paper employs a computable general equilibrium model (CGE) to analyse how a carbon tax and/or a national Emissions Trading System (ETS) would affect macroeconomic parameters in Turkey. The modelling work is based on three main policy options for the government by 2030, in the context of Turkey’s mitigation target under its Intended Nationally Determined Contribution (INDC), that is, reducing greenhouse gas (GHG) emissions by up to 21% from its Business as Usual (BAU) scenario in 2030: (i) improving the productivity of renewable energy by 1% per annum, a target already included in the INDC, (ii) introducing a new flat rate tax of 15% per ton of CO₂ (of a reference carbon price in world markets) imposed on emissions originating from carbon-intensive sectors, and (iii) introducing a new ETS with caps on emission permits. Our base path scenario projects that GHG emissions in 2030 will be much lower than Turkey’s BAU trajectory of growth from 430 Mt CO₂-eq in 2013 to 1.175 Mt CO₂-eq by 2030, implying that the government’s commitment is largely redundant. On the other hand, if the official target is assumed to be only a simple reduction percentage in 2030 (by 21%), but based on our more realistic base path, the government’s current renewable energy plans will not be sufficient to reach it.

• Turkey’s official INDC is based on over-optimistic assumptions of GDP growth and a highly carbon-intensive development pathway;

• A carbon tax and/or an ETS would be required to reach the 21% reduction target over a realistic base path scenario for 2030;

• The policy options considered in this paper have some effects on major sectors’ shares in total value-added. Yet the reduction in the shares of agriculture, industry, and transportation does not go beyond 1%, while the service sector seems to benefit from most of the policy options;

• Overall employment would be affected positively by the renewable energy target, carbon tax, and ETS through the creation of new jobs;

• Unemployment rates are lower, economic growth is stronger, and households become better off to a larger extent under an ETS than carbon taxation.

     

Using carbon finance to support climate policy objectives in high mountain ecosystems

Carbon markets and climate finance payments are being used to incentivize the mitigation of CO₂ arising from anthropogenic land-use change in forests, marine ecosystems, and lowland grasslands. However, no such consideration has been given to how these ‘carbon finance incentives’ might be applied to mountain grasslands and shrublands, ecosystems that contain a substantial amount of carbon. These incentives amount to more than US$350 billion per annum and could potentially support underfunded natural resource management (NRM) activities, which are urgently needed to address numerous stressors impacting these important ecosystems. In the mountain context, NRM activities could include adaptive grazing management, sustainable cropping, ecosystem preservation, ecosystem restoration, and engineered soil conservation measures. This article investigates the stressors, challenges, and priorities related to the NRM of carbon stocks in mountain grasslands and shrublands; why carbon markets and climate finance have not yet been utilized in this context; and, what is required to position mountain-based NRM activities as eligible for carbon finance incentives. Using surveys and interviews triangulated with a systematic literature review, the study found that carbon finance incentives are not well understood, both amongst mountain-focused experts and in the literature. The study also found the required technical methodologies, policy frameworks, and data to be largely undeveloped. This article proposes a top-down conceptual policy framework that can be used to develop key ‘enabling factors’ with the view of extending the eligibility of carbon markets and climate finance to NRM activities undertaken in mountain grasslands and shrublands in the same way that has been afforded to other ecosystems.

Policy relevance

This is the first study to explicitly highlight the important role that the mountain grasslands and shrublands might play in international climate policy, and how carbon finance mechanisms might support better NRM in these areas. It is also the first to investigate why these incentives have not been adopted thus far. The article concludes by proposing a novel top-down ‘carbon incentive enabling’ framework that could be driven by governments and mountain development focused organizations so as to capture some of the opportunities offered by carbon-based incentives, and help meet international climate policy objectives.     

国际碳税格局及其对中国的启示

本文在总结分析全球已经实施碳税的国家碳税实施情况及其效果,评价分析国内外学者对中国征收碳税的相关研究和科学观点的基础上,针对中国碳税设计提出如下建议：目前实施碳税的大多是发达国家,国际上征收碳税的舆论日益高涨,但国内对碳税征收要素研究还不透彻,依据中国的国情开征碳税环境尚不成熟,未来需要进一步加强对碳税开征各要素的调研。     

欧盟航空碳税及其国际影响

根据当前欧盟征收国际航空碳税政策的国际环境,介绍欧盟航空碳税的历史沿革、具体政策、二氧化碳排放监测方法,就各国反应及其国际影响进行分析.欧盟航空碳税可能会导致全球航空业成本增加,并最终转嫁给消费者;欧盟航空碳税对发达国家航空公司影响较小,而对发展中国家的航空公司影响较大.鉴于欧盟航空碳税对中国航空业的影响,建议尽早制定相关的碳排放标准,维护中国应有的发展权与话语权.     

The tools of climate adaptation policy: analysing instruments and instrument selection

Governments have a key role to play in the process of climate adaptation, through the development and implementation of public policy. Governments have access to a diverse array of instruments that can be employed to adapt their operations and influence the behaviour of individuals, organizations, and other governments. However, the choice of policy instrument is political, because it affects the distribution of benefits and costs, and entrenches institutional procedures and resources that are difficult to redeploy. This article identifies four key governing resources that governments employ in the service of adaptation and analyses these resources using criteria drawn from the policy studies literature. For each category, specific policy instruments are described, and examples are provided to illustrate how they have been used in particular jurisdictions. The article also discusses instrument selection, focusing on trade-offs among the instrument attributes, processes for setting the stage for instrument choice, jurisdictional constraints on instrument selection, and ways to avoid negative vertical and horizontal policy interplay.

Policy relevance

Adaptation is a nascent field of public policy, and courses of action to reduce vulnerability and build adaptive capacity are in their infancy. This article contributes to policy development and analysis by identifying the range of policy instruments available to governments and analysing concrete ways in which they are employed to implement adaptation policy objectives. Taking stock of these adaptation tools and comparing their behavioural assumptions and attributes helps to illuminate potential policy options, and to evaluate their technical viability, political acceptability, and economic feasibility. Providing examples of how these instruments have been implemented successfully in other jurisdictions offers ideas and lessons for public officials.     

Carbon taxes: a review of experience and policy design considerations

State and local governments in the USA are evaluating a wide range of policies to reduce carbon emissions, including carbon taxes, which have existed internationally for nearly 20 years. In this article, existing carbon tax policies, both internationally and in the USA, are reviewed, and carbon policy design and effectiveness are analysed. Design considerations include which sectors to tax, where to set the tax rate, how to use tax revenues, what the impact will be on consumers, and how to ensure that emissions reduction goals are achieved. Emissions reductions that are due to carbon taxes can be difficult to measure, although some jurisdictions quantify reductions in overall emissions, others examine impacts that are due to programmes funded by carbon tax revenues.     

Border carbon adjustments and the potential for protectionism

Balancing a legitimate fear that carbon leakage could undermine the impact of any global climate change agreement is a countervailing fear that leakage could be the excuse for protectionism in the guise of ‘border carbon adjustments’. This would be dangerous for the world trading system, risking disputes due to ambiguities in the details of World Trade Organization rules over what types of border measures are potentially and actually admissible. Even with good-quality data, there is considerable potential for judgemental discretion, and hence opportunistic manipulation, in estimating the carbon charges to levy on an imported product. This is true even given agreement on whether to use importer or exporter coefficients. A clear distinction needs to be made between environmental and competitiveness motives for border adjustments. The key argument is that the traditional symmetry, between origin (production)-based taxes and other charges (e.g. due to a cap-and-trade scheme) and those based on the destination (consumption) principle, breaks down in the case of carbon charges. The potential is explored for regional agreements to ensure origin as the basis for carbon levies, while recognizing the challenges this poses for the mutual recognition of emissions regimes in particular.     

基于多区域投入产出模型中美贸易隐含能源、碳排放的测算

采用多区域投入产出模型（MRIO）,利用欧盟资助开发的世界投入产出表和环境账户数据,测算了1995—2009年中国与美国的增加值贸易规模及净值,在此基础上利用环境账户中的能源消耗和碳排放数据测算出中美外贸隐含能源和隐含碳排放总体水平及其行业结构。研究表明：1995—2009年,中国对美国的增加值出口保持持续增长的态势,尤其是在中国加入世界贸易组织（WTO）后,但随后受2008年全球经济危机的影响,中国增加值出口规模有所减小;相比于美国,中国单位增加值能耗和碳排放水平较高,从而导致较大规模的隐含能源和隐含碳出口,长期处于隐含能源和隐含碳净输出国地位,且净输出规模呈现出上升的趋势;从行业结构来看,电力、燃气及水的供应业等能源行业是中国出口隐含能源和隐含碳排放的主要行业来源。     

Addressing climate change under preferential trade agreements: Towards alignment of carbon standards under the Transatlantic Trade and Investment Partnership

With its wide coverage of economic spheres and the variety of trade and investment measures currently under negotiation, the Transatlantic Trade and Investment Partnership opens windows of opportunity for advancing action on climate change. We examine possible avenues and international trade law implications for an alignment of carbon-related standards between the EU and the US. We compare EU and US carbon emissions standards for cars and argue that negotiators should strive for a mutual recognition of their equivalence for a transitional period, while pursuing the goal of full harmonization at the level of the highest standards of two parties at some date in the future. This could be a way to balance between economic and environmental interests and harness economic incentives for the benefit of climate.     

Slovenia's climate policy efforts: CO2 tax and implementation of EU ETS

Slovenia is required to reduce its greenhouse gas emissions to an average of 8% below the base year 1986 in the period 2008–2012, due to the ratification of the Kyoto Protocol in 2002. It was the first of the transition countries to implement a CO₂ tax in 1997. At the beginning of 2005, Slovenia joined other EU Member States by implementing the Emissions Trading Scheme. In contrast with other new EU Member States, Slovenia will be a net buyer of allowances. Therefore future movements on the emissions market will play an important role in the compliance costs of achieving the Kyoto target. The main purpose of this article is to present the establishment and characteristics of the first national allocation plan (NAP1) and to describe the main elements of the second national allocation plan (NAP2) for Slovenia within the EU Emissions Trading Scheme, the expected movements on the emissions allowances market in Slovenia, the expected compliance cost of achieving the Kyoto target and to present the main characteristics and efficiency of the CO₂ tax in Slovenia.     

Building a regime for climate protection: Finland and international climate policy

The effective management of climate change on a national as well as an international level requires close co-operation between the scientific community and the political sector. Climate change first became a major subject of scientific inquiry in the early 1980s, and real political interest in the issue was awakened towards the end of that decade. In the last few years, the dialogue between the scientific community and the political sector has increased considerably. As a result, climate change is today one of the most significant areas in environmental research and international environmental policy alike.This paper examines the emergence and consolidation of international climate change regime. The theory of regime building is used as discussed by Young (1989). International Cooperation. Cornell University Press, Ithaca. The paper begins with an outline of the historical emergence of climate research and climate policy. This is followed by a discussion of the history and development of the Rio Convention, with a look at the latest developments in international climate politics. The next section begins with an examination of the foundations and present strategies of Finnish climate policy, which is used as a case study, and the paper concludes with an assessment of the current state of Finnish climate policy, illustrating the problems of compliance individual countries face when adopting the norms and principles of the regime.     

Designing air ticket taxes for climate change mitigation: insights from a Swedish valuation study

Research on air travellers’ willingness to pay (WTP) for climate change mitigation has focussed on voluntary emissions offsetting so far. This approach overlooks policy relevant knowledge as it does not consider that people may value public goods higher if they are certain that others also contribute. To account for potential differences, this study investigates Swedish adults’ WTP for a mandatory air ticket surcharge both for short- and long-distance flights. Additionally, policy relevant factors influencing WTP for air travel emissions reductions were investigated. The results suggest that mean WTP is higher in the low-cost setting associated with short-distance flights (495 SEK/ tCO₂; 50 EUR/ tCO₂) than for long-distance flights (295 SEK/ tCO₂; 30 EUR/t CO₂). The respondents were more likely to be willing to pay the air ticket tax if they were not frequent flyers, if they were women, had a left political view, if they had a sense of responsibility for their emissions and if they preferred earmarking revenues from the tax for climate change mitigation and sustainable transport projects.

Key policy insights

• A mandatory air ticket tax is a viable policy option that might receive majority support among the population.

• While a carbon-based air ticket tax promises to be an effective tool to generate revenues, its potential steering effect appears to be lower for low cost contexts (short-distance flights) than for high cost contexts (long-distance flights).

• Policy consistency regarding the tax base and its revenue use may increase public acceptability of (higher) air ticket taxes. Earmarking revenues is clearly preferred to tax recycling or general budget use.

• Insights about the personal drivers behind WTP for emissions reductions from air travel can help to inform targeting and segmentation of policy interventions.