The Pricing of Greenhouse Gas Emissions. Policy Brief with Questions and Facts by Angela Köppl, Stefan Schleicher and Margit Schratzenstaller

Angela Köppl; Gerhard Streicher; Margit Schratzenstaller

13.11.2019

The Pricing of Greenhouse Gas Emissions

Policy Brief with Questions and Facts by Angela Köppl, Stefan Schleicher and Margit Schratzenstaller

In this Policy Brief by the WIFO economists Angela Köppl, Stefan Schleicher and Margit Schratzenstaller a supporting argumentation for the pricing of greenhouse gas emissions as instrument for climate policy is presented.

The paper places CO₂ pricing in a broader context and outlines how a CO₂ pricing package could be designed. Such a reform programme should pursue several objectives. One would be to reduce greenhouse gas emissions, especially CO₂. At the same time, a more productive use of other raw materials and a transition to a circular economy should also be encouraged. In addition, there is a need to create incentives for innovation. A policy package on CO₂ pricing should include compensatory measures that on the one hand mitigate undesirable distribution effects and on the other hand provide incentives for structural changes.