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Mapping and clustering the adoption of carbon pricing policies: what polities price carbon and why?

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  • Jakob Skovgaard
  • Sofía Sacks Ferrari
  • Åsa Knaggård

Abstract

Carbon pricing, including carbon taxes and emissions trading, has been adopted by different kinds of polities worldwide. Yet, beyond the increasing adoption over time, little is known about what polities – countries as well as sub- and supranational entities – adopt carbon pricing and why. This paper explores patterns of adoption (both implemented policies and those scheduled to be) through cluster analysis, with the purpose of investigating factors that could explain polities’ decisions to adopt carbon pricing. The study contributes empirically by studying carbon taxes and emissions trading together and by ordering the polities adopting carbon pricing into clusters. It also contributes theoretically, by exploring constellations of variables that drive the adoption of carbon pricing within individual clusters. We investigated 66 adopted policies of carbon pricing, which were divided into five clusters: early adopters, North-American subnational entities, Chinese pilot provinces, second-wave developed polities, and second-wave developing polities. The analysis indicates that the reasons for adopting carbon pricing have shifted over time. While international factors (climate commitments or influences from polities within the same region) are increasingly salient, domestic factors (including crises and income levels) were more important for the early adopters.Key policy insights Carbon pricing has become a global mainstream policy instrument.Economic and fiscal crises provide windows of opportunity for promoting carbon pricing.The international climate regime can support the adoption of carbon pricing through mitigation commitments and international financial and technical assistance.Learning between polities from the same region is a useful tool for promoting carbon pricing.Carbon intensive economies tend to prefer emissions trading over carbon taxes.

Suggested Citation

  • Jakob Skovgaard & Sofía Sacks Ferrari & Åsa Knaggård, 2019. "Mapping and clustering the adoption of carbon pricing policies: what polities price carbon and why?," Climate Policy, Taylor & Francis Journals, vol. 19(9), pages 1173-1185, October.
    • Handle: RePEc:taf:tcpoxx:v:19:y:2019:i:9:p:1173-1185
    DOI: 10.1080/14693062.2019.1641460
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    Citations

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    Cited by:

    1. Best, Rohan & Zhang, Qiu Yue, 2020. "What explains carbon-pricing variation between countries?," Energy Policy, Elsevier, vol. 143(C).
    2. Paola D'Orazio, 2022. "Mapping the emergence and diffusion of climate-related financial policies: Evidence from a cluster analysis on G20 countries," International Economics, CEPII research center, issue 169, pages 135-147.
    3. Martin Rabbia, 2023. "Why did Argentina and Uruguay decide to pursue a carbon tax? Fiscal reforms and explicit carbon prices," Review of Policy Research, Policy Studies Organization, vol. 40(2), pages 230-259, March.
    4. Samantha L. Mosier & Arbindra Rimal & Megan M. Ruxton, 2020. "A Song of Policy Incongruence: The Missing Choir of Consumer Preferences in GMO‐Labeling Policy Outcomes," Review of Policy Research, Policy Studies Organization, vol. 37(4), pages 511-534, July.
    5. Qiuyue Li & Hao Wang & Zhenshan Li & Shangwei Yuan, 2022. "A Comparative Study of the Effect of Different Carbon-Reduction Policies on Outsourcing Remanufacturing," IJERPH, MDPI, vol. 19(6), pages 1-22, March.
    6. Cyriac S. Mvolo & Emmanuel A. Boakye & Ahmed Koubaa, 2023. "Chemical Elements Content and Distributions within Different Tissue Types of White Spruce," Energies, MDPI, vol. 16(7), pages 1-14, April.
    7. Easwaran Narassimhan & Stefan Koester & Kelly Sims Gallagher, 2022. "Carbon Pricing in the US: Examining State-Level Policy Support and Federal Resistance," Politics and Governance, Cogitatio Press, vol. 10(1), pages 275-289.
    8. Vít Pászto & Jarmila Zimmermannová & Jolana Skaličková & Judit Sági, 2020. "Spatial Patterns in Fiscal Impacts of Environmental Taxation in the EU," Economies, MDPI, vol. 8(4), pages 1-18, November.
    9. Inhwan Ko & Taedong Lee, 2022. "Carbon pricing and decoupling between greenhouse gas emissions and economic growth: A panel study of 29 European countries, 1996–2014," Review of Policy Research, Policy Studies Organization, vol. 39(5), pages 654-673, September.
    10. Huang, Rui & Lv, Guonian, 2021. "The climate economic effect of technology spillover," Energy Policy, Elsevier, vol. 159(C).
    11. Alberto Gianoli & Felipe Bravo, 2020. "Carbon Tax, Carbon Leakage and the Theory of Induced Innovation in the Decarbonisation of Industrial Processes: The Case of the Port of Rotterdam," Sustainability, MDPI, vol. 12(18), pages 1-23, September.
    12. Cyriac S. Mvolo & James D. Stewart & Christopher Helmeste & Ahmed Koubaa, 2021. "Variation of White Spruce Carbon Content with Age, Height, Social Classes and Silvicultural Management," Energies, MDPI, vol. 14(23), pages 1-13, December.
    13. Jonas Meckling & Clara Galeazzi & Esther Shears & Tong Xu & Laura Diaz Anadon, 2022. "Energy innovation funding and institutions in major economies," Nature Energy, Nature, vol. 7(9), pages 876-885, September.
    14. Jochen Markard & Daniel Rosenbloom, 2020. "Politics of low-carbon transitions: The European Emissions Trading System as a Trojan Horse for climate policy?," Working Papers on Innovation Studies 20200116, Centre for Technology, Innovation and Culture, University of Oslo.
    15. Marco Schletz & Ana Cardoso & Gabriela Prata Dias & Søren Salomo, 2020. "How Can Blockchain Technology Accelerate Energy Efficiency Interventions? A Use Case Comparison," Energies, MDPI, vol. 13(22), pages 1-23, November.
    16. Muth, Daniel, 2023. "Pathways to stringent carbon pricing: Configurations of political economy conditions and revenue recycling strategies. A comparison of thirty national level policies," Ecological Economics, Elsevier, vol. 214(C).
    17. Jason Monios, 2023. "The Moral Limits of Market-Based Mechanisms: An Application to the International Maritime Sector," Journal of Business Ethics, Springer, vol. 187(2), pages 283-299, October.
    18. Anna Komarova, 2022. "State Regulation of Energy Transition and Economic Development," Energies, MDPI, vol. 15(12), pages 1-13, June.

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