Mitigation costs, distributional effects, and ancillary benefits of carbon policies in the Nordic countries, the UK, and Ireland


Bye, B. S. Kverndokk og K. E. Rosendahl




Mitigation and Adaptation Strategies for Global Change

vol. 7, no. 4, s. 339-366


This paper provides a survey of top-down modelling analyses of carbon (C) abatement on mitigation costs, distributional effects and ancillary benefits in the Nordic countries, the UK and Ireland. Special emphasis is placed on the effects of revenue recycling and tax exemptions. According to the analyses surveyed, modest emissions reductions can be met without substantial costs for the countries studied, and a strong double dividend is found in some analyses. The gross domestic product (GDP) or welfare effects are mostly in the range of -0.4 and 1.2 per cent when C emissions are reduced by 20-30 per cent. Lowest costs are obtained without tax exemptions and with tax revenues used to reduce distortionary taxes. Ancillary benefits are mostly in the range $35-80/MgC, i.e., about the same order of magnitude as the mitigation costs. Distributional effects are mostly regressive, unless the tax revenues are distributed in lump-sum fashion with equal transfers to each household.


D58, Q43


Ancillary benefits, distributional effects, double dividend, global warming, mitigation costs


Oppdragsgiver: IPCC
Oppdragsgivers prosjektnr.:
Frisch prosjekt: 3302 - Intergovernmental Panel on Climate Change (IPCC)