Effects of carbon pricing and other climate policies on CO2 emissions

Kohlscheen, Emanuel, Moessner, Richhild and Takats, Elod (2025) Effects of carbon pricing and other climate policies on CO2 emissions. National Institute Economic Review. ISSN 0027-9501

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Abstract

In this study, we provide ex post empirical analysis of the effects of climate policies on carbon emissions at the aggregate national level, using a comprehensive database of 121 countries. Carbon taxes and emissions trading systems (ETS), and the overall stringency of climate policies are considered. We use dynamic panel regressions, controlling for macroeconomic factors (economic development, GDP growth, urbanisation and the energy mix). Higher carbon taxes and ETS prices reduce carbon emissions. An increase in carbon taxes by $10 per ton of CO2 reduces CO2 emissions per capita by 1.3% in the short run and by 4.6% in the long run.

Item Type:	Article
Additional Information:	© The Author(s), 2025
Divisions:	LSE
Subjects:	H Social Sciences > HD Industries. Land use. Labor Q Science > QC Physics
JEL classification:	Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q0 - General > Q00 - General Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy
Date Deposited:	12 Nov 2025 00:17
Last Modified:	14 Nov 2025 09:48
URI:	http://eprints.lse.ac.uk/id/eprint/130125

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