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The Political Economy of Carbon Pricing: a Panel Analysis

Author

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  • G.G. Dolphin

    (Cambridge Judge Business School, University of Cambridge and Energy Policy Research Group)

  • M.G. Pollitt

    (Cambridge Judge Business School, University of Cambridge and Energy Policy Research Group)

  • D.M. Newbery

    (Faculty of Economics, University of Cambridge and Energy Policy Research Group)

Abstract

In virtually all countries that explicitly price carbon, its effective price, i.e. the emissions-weighted price, remains low. Our analysis focuses on the political economy of this effective price, using data on an international panel of jurisdictions over the period 1990-2012. First, we examine the decision to introduce a carbon pricing policy. Second, we shed light on its stringency. Results show that both the odds of the implementation and the stringency of the carbon pricing policy are negatively affected by the share of electricity coming from coal and the relative share of industry in the economy. The results also broadly support an environmental Kuznets curve hypothesis as gross domestic product increases both the odds of the implementation and the policy stringency. Institutional and political factors are found to influence the implementation but not the stringency of carbon pricing schemes.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • G.G. Dolphin & M.G. Pollitt & D.M. Newbery, 2016. "The Political Economy of Carbon Pricing: a Panel Analysis," Working Papers EPRG 1627, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1627
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    More about this item

    Keywords

    carbon pricing; panel analysis; political economy; electricity sector;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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