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Does carbon pricing matter? An exploratory study based on international data

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  • Praveen Kumar

    (Indian Institute of Management Jammu)

Abstract

In this article, I have assessed whether carbon pricing effectively controls international CO2 emissions. For this purpose, I run a panel data regression analysis by utilizing Per Capita CO2 emissions as a dependent variable and Carbon Tax initiatives as an independent variable in the presence of five control variables. Unlike other studies, my research sample included not only all the countries for the sample period 2019–2021 but also the effectiveness of all Carbon taxes and ETSs operating worldwide. The outcomes show that carbon tax has a statistically significant and negative impact on CO2 emanations. The mitigation impact of a carbon tax is powerful and depicts that all 64 Carbon Tax/Pricing initiatives operating internationally are helping the world to reduce national and international CO2 emissions. These findings are also consistent with the argument raised in this study that once a carbon tax is applied or is under consideration, a reduction in CO2 emissions follows. This study provides policymakers with significant implications of the country's Carbon Tax initiatives in the best interests of the world's stakeholders.

Suggested Citation

  • Praveen Kumar, 2024. "Does carbon pricing matter? An exploratory study based on international data," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(6), pages 517-526, December.
    • Handle: RePEc:pal:jorapm:v:23:y:2024:i:6:d:10.1057_s41272-023-00449-3
    DOI: 10.1057/s41272-023-00449-3
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