The Earth Institute’s Research Program on Sustainability Policy and Management has conducted a comparative study on the suitability of different carbon pricing mechanisms for mitigating climate change in different economic and institutional contexts.
The scope of the study consisted of 37 countries with planned or implemented carbon tax and cap-and-trade schemes. Each country’s pricing mechanism was evaluated based on the following indicators: emissions reduction, regulatory stability, distributional effects, interactions with other policies and the impact on global trade.
One of the important findings was that the local carbon price burden, which embodies the ability of the average citizen to shoulder the burden of carbon prices, is a strong indicator of the likelihood of regulatory stability. To gain an extensive view of the findings, access the full report through the Enel Foundation website.