Climate Policy Leadership in an Interconnected World

Towards net zero emissions in Denmark

“…In the context of unprecedented recovery packages following the COVID-19 crisis, green investment measures such as infrastructure or energy efficiency renovations are among the most effective to support economic growth and climate in high-income countries (Hepburn et al, 2020[91]). Accordingly, the Danish plan for recovery includes substantial support (DKK 3 900 million) for research and development of green technologies (OECD, 2021 [92]). While there are upfront costs from reducing consumption to fund investment (Pisani-Ferry, 2021 [24]), some funding can come from redirecting investment away from emissions-intensive activities and a large share of green investments will carry long-term welfare and economic benefits: for example, there are large upfront costs from investing in wind generation, but longer-term benefits from savings in fuel costs.…”

Carbon pricing and COVID-19

“…The crisis has also had significant social and economic ramifications across the globe while revealing multiple significant vulnerabilities of our current economic system. Global interconnectedness accelerated the spread of the virus in the early days of the pandemic while complex global value chains struggled to deliver key medical material in time to protect people, notably those on the front line (OECD, 2020 [11]). In addition, the crisis has exposed key social inequalities, exacerbating those both across and within countries.…”

“…The economic and health effects of COVID-19 have exacerbated pre-existing inequalities both across and within countries (OECD, 2020 [11]). Vulnerable groups such as the poor within countries have been disproportionately affected by COVID-19, unemployment rates have sharply increased across the world, and 119-124 million people have fallen back to extreme poverty in 2020, undoing several years of progress on this front (UN, 2021 [184]).…”

Carbon leakage and agriculture

“…sanitary and phytosanitary requirements. 6 Throughout this study, the term "competitiveness" is used in a narrow sense and refers to cost efficiency of firms (and by extension sectors) relative to competitors on international markets. Cost efficiency is defined as the ratio of total costs to output.…”

“…Relatedly, agricultural markets are currently heavily distorted by policiessuch as quantitative restrictions to imports, high tariffs, and various forms of government support to domestic agriculture production, some of which can be environmentally harmful (OECD, 2020 [6]). Estimating the effects of additional environmental policiese.g.…”