Understanding the role carbon pricing revenues can play in financing the transition

An activity of the European Union Climate Dialogues (EUCDs) project, funded by the European Union, seeking to foster discussion and collect inputs for a study carried out by the Institute for Climate Economics (I4CE), which aims to enlarge and enhance the understanding of existing approaches on the use of revenues from carbon pricing mechanisms and support a switch to a comprehensive perspective on the implementation of decarbonization pathways that integrates carbon revenues.

Date: October 5th, 2023

Time Session 2.a (Asia Pacific): 9:30 – 11:00 AM CEST

Time Session 2.b (Americas): 4:30 – 6:00 PM CEST

Format: online 

Context:   

Carbon pricing is increasingly applied as a key instrument for the climate transition and the related revenues are expected to keep increasing in the coming years. National and local governments can adopt various approaches to using these revenues, which will have specific consequences in terms of public finance management, sustainability, and resilience to political change, among other aspects. But beyond specific decisions on the use of revenues, policymakers will have to determine the best way to communicate these decisions to ensure transparency and accountability. This aspect could be critical for the public acceptability of these measures, along with the effectiveness of the use of revenues towards policy objectives and in financing the transition towards low-carbon and climate resilient economies.

Within the framework of EU funded the European Union Climate Dialogues (EUCDs)project, I4CE has been tasked to carry out an international study and workshops on the use revenues from carbon pricing mechanisms (ETS, carbon tax), including in the EU. The aim is to enlarge and enhance the existing approaches to the use of revenues from carbon pricing mechanisms and support a switch from a narrow earmarking/no-earmarking debate to a comprehensive perspective on the implementation of decarbonization pathways that integrates carbon revenues. Two international workshops targeting EUCDs and non-EUCDs countries are planned for September and October 2023 to discuss preliminary findings and share relevant experiences.

Objectives:  

The workshops aimed to provide a space to discuss country practices regarding the use of revenues from carbon pricing mechanisms, with a focus on the role carbon pricing revenues can play in financing the transition.

Specific objectives: 

• To provide a broad overview of country practices on the use of carbon pricing revenues.
• To gain a deeper understanding of the conditions that facilitated the implementation and sustainability of specific country practices.
• To promote exchange and learning from country peers and experts’ experiences.

Participants:  

Representatives of national and/or local governments and experts from international organizations, academia, and think tanks of EUCDs and non-EUCDs countries with relevant carbon pricing initiatives. Focal points will be invited and may share the invitation with colleagues working on the topic.

Format:

Non-public (by invitation) virtual events with two sessions each to cover different time zones (through Zoom with registration). For each session, speakers were invited to share country experiences in 7-minute presentations. Discussion spaces were meant for all participants to share questions, remarks, or views on the topic. Active participation was encouraged.