Health co-benefits and trade-offs of carbon pricing: a narrative synthesis

Carbon pricing is a key component of current climate policy agendas. There are a variety of societal and health impacts from carbon pricing interventions (e.g. from improved air quality). A better understanding of potential health impacts and how they depend on context and policy design is crucial to improve the political feasibility and fairness of carbon pricing. Recent reviews have synthesized evidence on the effectiveness, equity and perceptions of carbon pricing and on the health co-benefits of mitigation. This review provides a narrative structured synthesis of the health impacts of carbon pricing. We identified 58 relevant publications of which all were modelling studies. We classify review findings into policy-relevant categories, synthesizing information on how carbon pricing affects health outcomes when implemented in different contexts, in isolation or as part of policy mixes. Findings suggest that internalization of health co-benefits in optimal price level estimates could lead to substantial mitigation in some regions. There are also opportunities to design carbon pricing to improve health outcomes, including through progressive or targeted use of revenues to improve food security, subsidize healthier diets or promote active transportation. Revenue use, price differentiation, market size and permit allocation of emissions trading schemes (ETS), and interaction with other public health or mitigation policies all influence health outcomes. Overall, the health impacts of carbon pricing are highly context-specific and further evidence is needed, particularly on health inequalities and ex-post analysis. However, existing evidence suggests that it is possible to design health-beneficial carbon pricing policies, thus enhancing policy acceptability and feasibility.Internalizing health co-benefits into optimal carbon pricing estimates could lead to substantial emission reductions in some regions, although additional action is needed to encourage price levels compatible with climate targetsHealth co-benefits can be boosted through key elements of policy design including price differentiation across commodities and regions, revenue use or ETS designCareful policy design can enhance health gains at a small or insignificant cost in terms of climate mitigation effectiveness and efficiency.The implementation of carbon pricing as part of broader policy mixes with a strong focus on progressivity and equity is crucial to achieving health co-benefits