Intensity-Based Rebating of Emission Pricing Revenues
Carbon pricing policies worldwide are increasingly coupled with direct or indirect subsidies where emissions pricing revenues are rebated to the regulated entities. This paper analyzes the incentives created by two novel forms of rebating that rewa...
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World Bank, Washington, DC
2022
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| Online Access: | http://documents.worldbank.org/curated/en/099146306012230610/IDU09a5d8e2808ae70458f0a57405e2997c0969c http://hdl.handle.net/10986/37498 |
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okr-10986-374982022-06-03T05:10:31Z Intensity-Based Rebating of Emission Pricing Revenues Böhringer, Christoph Fischer, Carolyn Rivers, Nicholas CLIMATE CHANGE POLICY CARBON PRICING EMISSION INTENSITY REDUCTION ABSOLUTE EMISSION REDUCTION SOCIAL COST OF CARBON OUTPUT-BASED REBATE INTENSITY-BASED REBATE CARBON EMISSION REDUCTION CARBON REBATING SCHEMES CLIMATE CHANGE ECONOMICS ENVIRONMENTAL POLICY ENERGY POLICY Carbon pricing policies worldwide are increasingly coupled with direct or indirect subsidies where emissions pricing revenues are rebated to the regulated entities. This paper analyzes the incentives created by two novel forms of rebating that reward additional emission intensity reductions: one given in proportion to output (intensity-based output rebating) and another that rebates a share of emission payments (intensity-based emission rebating). These forms are contrasted with output-based rebating, abatement-based rebating, and lump sum rebating. Given the same emission price, intensity-based output rebating incentivizes the most intensity reductions, while abatement-based rebating incentivizes the most output reductions, and output-based rebating puts the least pressure on output (and emissions); intensity-based emissions rebating lies in between these, by implicitly subsidizing emissions while incentivizing intensity reductions. The paper supplements partial equilibrium theoretical analysis with numerical simulations to assess the performance of different mechanisms in a multisector general equilibrium model that accounts for economywide market interactions. 2022-06-02T16:38:20Z 2022-06-02T16:38:20Z 2022-05 Working Paper http://documents.worldbank.org/curated/en/099146306012230610/IDU09a5d8e2808ae70458f0a57405e2997c0969c http://hdl.handle.net/10986/37498 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
CLIMATE CHANGE POLICY CARBON PRICING EMISSION INTENSITY REDUCTION ABSOLUTE EMISSION REDUCTION SOCIAL COST OF CARBON OUTPUT-BASED REBATE INTENSITY-BASED REBATE CARBON EMISSION REDUCTION CARBON REBATING SCHEMES CLIMATE CHANGE ECONOMICS ENVIRONMENTAL POLICY ENERGY POLICY |
| spellingShingle |
CLIMATE CHANGE POLICY CARBON PRICING EMISSION INTENSITY REDUCTION ABSOLUTE EMISSION REDUCTION SOCIAL COST OF CARBON OUTPUT-BASED REBATE INTENSITY-BASED REBATE CARBON EMISSION REDUCTION CARBON REBATING SCHEMES CLIMATE CHANGE ECONOMICS ENVIRONMENTAL POLICY ENERGY POLICY Böhringer, Christoph Fischer, Carolyn Rivers, Nicholas Intensity-Based Rebating of Emission Pricing Revenues |
| description |
Carbon pricing policies worldwide are
increasingly coupled with direct or indirect subsidies where
emissions pricing revenues are rebated to the regulated
entities. This paper analyzes the incentives created by two
novel forms of rebating that reward additional emission
intensity reductions: one given in proportion to output
(intensity-based output rebating) and another that rebates a
share of emission payments (intensity-based emission
rebating). These forms are contrasted with output-based
rebating, abatement-based rebating, and lump sum rebating.
Given the same emission price, intensity-based output
rebating incentivizes the most intensity reductions, while
abatement-based rebating incentivizes the most output
reductions, and output-based rebating puts the least
pressure on output (and emissions); intensity-based
emissions rebating lies in between these, by implicitly
subsidizing emissions while incentivizing intensity
reductions. The paper supplements partial equilibrium
theoretical analysis with numerical simulations to assess
the performance of different mechanisms in a multisector
general equilibrium model that accounts for economywide
market interactions. |
| format |
Working Paper |
| author |
Böhringer, Christoph Fischer, Carolyn Rivers, Nicholas |
| author_facet |
Böhringer, Christoph Fischer, Carolyn Rivers, Nicholas |
| author_sort |
Böhringer, Christoph |
| title |
Intensity-Based Rebating of Emission Pricing Revenues |
| title_short |
Intensity-Based Rebating of Emission Pricing Revenues |
| title_full |
Intensity-Based Rebating of Emission Pricing Revenues |
| title_fullStr |
Intensity-Based Rebating of Emission Pricing Revenues |
| title_full_unstemmed |
Intensity-Based Rebating of Emission Pricing Revenues |
| title_sort |
intensity-based rebating of emission pricing revenues |
| publisher |
World Bank, Washington, DC |
| publishDate |
2022 |
| url |
http://documents.worldbank.org/curated/en/099146306012230610/IDU09a5d8e2808ae70458f0a57405e2997c0969c http://hdl.handle.net/10986/37498 |
| _version_ |
1764487322983727104 |