Impacts of Carbon Prices on Indicators of Competitiveness – A Review of Empirical Findings (OECD)

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Concerns around potential losses of competitiveness as a result of unilateral action on carbon pricing are often central for policy makers contemplating the introduction of such instruments. This OECD paper is a review of literature on ex post empirical evaluations of the impacts of carbon prices on indicators of competitiveness as employed in the literature, including employment, output or exports, at different levels of aggregation. Most studies reviewed find that carbon prices cause emissions abatement, but fail to measure any economically meaningful competitiveness effects as a consequence of these policies. In many cases it is also found that the preferential treatment for certain industries through exemptions and free allocation of emissions permits was likely not necessary to maintain the competitive position of the respective firms. The report is available to download on the OECD website.