Carbon pricing: theory and practice

Carbon pricing policy is a fundamental humanly devised theoretical and practical cornerstone in the fight against climate change. It involves short term and long term policies, theoretical and practical considerations. A quantitative global stabilisation target range for the stock of greenhouse gases in the atmosphere is needed, because it is an important and useful foundation in the shaping of a comprehensive climate pricing policy. A global stabilisation target range is obviously a long term policy to control climate change and events ensuing excessive increase in temperature. Setting long term objectives in the fight against climate change are substantial in avoiding catastrophic consequences therefore short term policies, which aim advances in emission reductions, have to be consistent with the pre-defined long term stabilisation goals. Short term policy reaction means using price-driven instruments like taxes and tradable quotas. These instruments allow broad flexibility in the parameters of emission reduction, and provide opportunities and incentives wherewith the cost of mitigation and abatement can be kept down. Taxes and tradable quotas give the flexibility in how, where and when emission reduction can be accomplished thereby reaching agreements between states and companies may result an appropriate and environment-conscious emission scheme, that can fit into the long term objectives.

Tax incentives applied against externalities: International examples of fat tax and carbon tax

This study assesses the Pigou taxes introduced as a response to negative externalities in practice. The authors analyze the international practice and effectiveness of taxation on food products harmful to health and on carbon emissions harmful to the environment and, in relation to these two types of taxes, the focus is on the opportunities and the factors reducing efficiency.