Climate protection through CO2 prices — the role of emerging and developing countries

International climate targets

At the Rio Conference in 1992, the principle of “common but differentiated responsibilities” of states in protecting the climate was established for the first time.

Climate protection through CO2 prices

Many industrialized countries, and the European Union, in particular, are increasingly using the pricing of CO2-intensive products as a particularly effective and efficient instrument for achieving jointly defined climate targets.

Greater effectiveness: Avoiding carbon leakage

If an industrialized country unilaterally increases its carbon price, domestic companies may lose their international competitiveness. Therefore, there is an incentive to relocate emissions-intensive economic activities to countries with less stringent climate policies.

More efficiency: saving CO2 where it costs the least

In principle, greenhouse gas emissions should be saved where there are the lowest emission avoidance costs. As a result, the cost of a particular targeted emissions reduction can be reduced. Alternatively, more climate-damaging emissions can be avoided with the same amount of resources.

Policy recommendations

Fortunately, there are options for solving both of the problems outlined.

Outlook

Climate change is a global problem that ultimately requires a global solution. National solo efforts to reduce CO2 emissions are necessary but insufficient and may even have a negative impact due to carbon leakage.

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Global & European Dynamics

Global & European Dynamics

Our mission on this blog is to shed light on Europe’s role in the world economy. https://globaleurope.eu/