The economic and environment benefits from international co-ordination on carbon pricing: a review of economic modelling studies ^*

This paper reviews quantitative estimates of the economic and environmental benefits from different forms international co-ordination on carbon pricing based modelling studies. Forms include: harmonising prices (e.g. through linking markets), extending coverage schemes, phasing out fossil fuel subsidies, developing sectoral agreements, establishing mechanisms to mitigate leakage. All co-operation could deliver benefits, both lower mitigation costs) reducing greenhouse gas (GHG) emissions leakage). There is scope considerably increase pricing, since until 2021 only around 40% energy-related CO2 in 44 OECD G20 countries face a price. also significant improve pricing: moving unilateral globally harmonized price reach 1st round NDC targets for 2030 can reduce global cost average by two thirds or $229 billion. Benefits tend be higher with broader participation countries, sectors and, more ambitious policy goals. Extending non-CO2 GHG costs up 48%. Absolute savings almost 70% reductions line 2 °C target. Most, but not all, gain co-operation, these vary significantly across regions. Complementary measures outside technology transfers) potentially ensure that provides all countries.