Understanding and Mitigating Distributional Effects of Emissions Trading

Carbon pricing, whether through emissions trading or carbon taxes, changes the relative prices of goods which results in some actors paying more for energy services than others. This can create problems, particularly in countries that already suffer from inequitable distribution of incomes, from poverty and a lack of access to energy. Understanding these problems is crucial for designing market-based policies that are socially acceptable. How can adverse impacts on vulnerable households, communities, workers, and firms be avoided? This webinar will explore the distributional effects of emissions trading schemes (ETS) on different societal groups, and how they can be mitigated through the use of auction revenues and ETS design.

Dr Constanze Haug, Executive Board Member at adelphi and former Head of the ICAP Secretariat presented her insights on this important issue.
Anthony Cox, Senior Policy Advisor at the Ecologic Institute and Ira Dorband, Economist at the World Bank, discussed Constanze’s input. Ira spoke on behalf of the World Bank, and not as a representative of MCC. This affiliation was accidentally included in the previous recording.

This webinar is part of the ETS for Policy Practitioners webinar series, hosted by ICAP with support from the European Commission.