Systematic review and meta-analysis of ex-post evaluations on the effectiveness of carbon pricing

Abstract

Today, more than 70 carbon pricing schemes have been implemented around the globe, but their contributions to emissions reductions remains a subject of heated debate in science and policy. Here we assess the effectiveness of carbon pricing in reducing emissions using a rigorous, machine-learning assisted systematic review and meta-analysis. Based on 483 effect sizes extracted from 80 causal ex-post evaluations across 21 carbon pricing schemes, we find that introducing a carbon price has yielded immediate and substantial emission reductions for at least 17 of these policies, despite the low level of prices in most instances. Statistically significant emissions reductions range between –5% to –21% across the schemes (–4% to –15% after correcting for publication bias). Our study highlights critical evidence gaps with regard to dozens of unevaluated carbon pricing schemes and the price elasticity of emissions reductions. More rigorous synthesis of carbon pricing and other climate policies is required across a range of outcomes to advance our understanding of “what works” and accelerate learning on climate solutions in science and policy.

Muddling through Climate Change: A Qualitative Exploration of India and U.S. Climate Experts’ Perspectives on Solutions, Pathways, and Barriers

“…A recent meta-analysis provides strong evidence that carbon pricing schemes are effective [26]. The authors analyze 21 carbon pricing schemes and find that 17 have led to emissions reductions ranging from 4 to 15% [26]. These findings differ greatly from a previous review that found reductions of just 2% on average [22].…”

“…For example, in the United States, there was a failed 1990s effort to enact a carbon tax (the BTU tax) and a failed 2000s effort to enact a cap-and-trade bill; thus, there is no national-level price on carbon in the country [23]. A recent meta-analysis provides strong evidence that carbon pricing schemes are effective [26]. The authors analyze 21 carbon pricing schemes and find that 17 have led to emissions reductions ranging from 4 to 15% [26].…”

“…On the side of pushing for national-scale policies, scientists and policymakers could continue to look for ways where there may be gains from muddling through on carbon pricing approaches. As the recent meta-analysis on carbon pricing schemes [26] found, there are decarbonization gains to be had despite a wide variety of approaches. Whether or not a national carbon tax is implemented, promoting a variety of pricing approaches could potentially lead to improvements, even if it may be haphazard in the short run.…”