Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/235290 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 8920
Publisher: 
Center for Economic Studies and Ifo Institute (CESifo), Munich
Abstract: 
The UK has pledged to cut greenhouse gases 68 percent below 1990 levels by 2030, to be emissions neutral by 2050, and to phase out internal combustion engine vehicles by 2030. Much progress has been made, but fully achieving these ambitious objectives with the current policy framework will be challenging as it involves multiple and overlapping pricing schemes with significant sectoral differences in carbon prices and may be difficult to scale up on political and administrative grounds. This paper discusses an alternative framework consisting of: (i) a comprehensive carbon price (ideally a tax) rising to at least £60 (US $75) per ton by 2030; and (ii) reinforcing sectoral policies, most importantly feebates for the transport, industrial, and building sectors. This framework could implement mitigation targets, while limiting burdens on households and firms to enhance acceptability, and still raise revenues of 0.8 percent of GDP in 2030. The UK could also leverage its COP26 presidency to promote dialogue on international carbon price floors and pricing of international transport emissions.
Subjects: 
climate change
net-zero
UK climate mitigation
carbon pricing
feebate
international carbon price floor
JEL: 
Q48
Q54
Q58
H23
Document Type: 
Working Paper
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