The political economy of carbon pricing: a panel analysis

摘要

In virtually all jurisdictions that explicitly price carbon, its average (emissionsweighted)price remains low. Our analysis focuses on the political economy of itsintroduction as well as its stringency in an international panel of national and NorthAmerican subnational jurisdictions. Results suggest that political economy factorsprimarily affected the former and that policy stringency is a highly persistent process.This has two important policy implications. First, successful passage of carbonpricing legislation will either come with contemporaneous compensation of incumbent,CO_2-intensive, sectors or occur after their relative weakening. Second, if politicaleconomy constraints continue to prevail, climate change mitigation strategieswill require multiple instruments.