Measuring Comprehensive Carbon Prices of National Climate Policies

Journal Article, Climate Policy 22:2, 198-207.

We measure the comprehensive carbon price from 2008 to 2019 resulting from climate policies imposed by 25 high-polluting countries that represent 82 percent of global carbon dioxide (CO₂) emissions in 2019. We consider seven types of major market-based policies commonly used to create marginal incentives to reduce emissions: carbon taxes, emissions trading systems, fossil fuel taxes, fossil fuel subsidies, renewable portfolio standards, feed-in tariffs, and low-carbon fuel standards. We measure country-level comprehensive carbon prices by summing across all seven policies the product of (1) the marginal incentive imposed by a policy (expressed in dollars per ton of CO₂ emitted), and (2) a CO₂-emissions-coverage weight for that policy (equal to the proportion of CO₂ emissions regulated by the policy relative to that country’s total CO₂ emissions). We measure the global comprehensive carbon price by summing across all 25 countries the product of (1) each country’s comprehensive carbon price, and (2) that country’s proportion of CO₂ emissions relative to total CO₂ emissions from our sample of 25 countries.