Summary
This systematic review synthesises quantitative estimates from economic modelling studies on the benefits of international carbon pricing coordination. The analysis demonstrates that harmonising global carbon prices could reduce mitigation costs by approximately two-thirds (USD 229 billion) to meet 2030 NDC targets, with additional savings of 70% when aligned with 2°C climate targets. Benefits increase substantially with broader country participation, sectoral coverage, and inclusion of non-CO₂ greenhouse gases, though gains are unevenly distributed across countries.
UK applicability
The United Kingdom, as an OECD member with established carbon pricing mechanisms, could benefit from greater international coordination to reduce its mitigation costs whilst meeting climate commitments. The findings support the case for linking the UK Emissions Trading Scheme with other systems and extending carbon pricing coverage to currently unpriced sectors.
Key measures
Global mitigation costs (USD billions), greenhouse gas emissions reductions, carbon leakage rates, carbon price harmonization levels, sectoral and emissions coverage percentages, cost savings by country and region
Outcomes reported
The study quantified economic and environmental benefits from different forms of international carbon pricing coordination based on economic modelling studies. It estimated cost savings, emissions reductions, and carbon leakage mitigation across various policy scenarios and country groupings.
Topic tags
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