Pricing Greenhouse Gas Emissions:Building a systematic stocktaking and mapping of mitigation policies

This chapter provides climate policy context and gives an overview of the mitigation policy instruments that governments can deploy or reform to accelerate the transition to net-zero greenhouse gas (GHG) emissions. It then describes the methodology of the Effective Carbon Rates and Taxing Energy Use database, which takes stock of emissions trading systems, carbon taxes, fuel excise taxes, fossil fuel subsidies, electricity excise taxes and electricity subsidies in 71 countries, including all OECD member countries. The database contains several composite indicators, including the Effective Carbon Rate (ECR), which is the sum of permit prices from emissions trading systems, carbon taxes and fuel excise taxes, and the Net ECR, i.e. the ECR minus fossil fuel subsidies that decrease pre-tax fossil fuel prices. The chapter also outlines the effective tax rates framework that is used for the systematic stocktaking, and explains how effective tax rates are mapped to GHG emissions and energy use.