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Gunnar S. Eskeland

For the latest thinking about the international financial system, monetary policy, economic development, poverty reduction, and other critical issues, subscribe to Finance & Development (F&D). This lively quarterly magazine brings you in-depth analyses of these and other subjects by the IMF’s own staff as well as by prominent international experts. Articles are written for lay readers who want to enrich their understanding of the workings of the global economy and the policies and activities of the IMF.

Ian W.H. Parry, Mr. Dirk Heine, Eliza Lis, and Shanjun Li

Abstract

Many energy prices in many countries are wrong. They are set at levels that do not reflect environmental damage, notably global warming, air pollution, and various side effects of motor vehicle use. In so doing, many countries raise too much revenue from direct taxes on work effort and capital accumulation and too little from taxes on energy use.

Alan Krupnick and Ian W.H. Parry

Abstract

Carbon pricing policies (carbon taxes and emissions trading systems) are easily the best instruments on the grounds of effectiveness, cost-effectiveness, and promoting clean technology investments.

Ian W.H. Parry, Mr. Dirk Heine, Eliza Lis, and Shanjun Li

Abstract

Fossil fuels are used pervasively to generate electricity, power transportation vehicles, and provide heat for buildings and manufacturing processes. Fuel combustion produces carbon dioxide (CO2) emissions and various local air pollutants, and use of transportation vehicles also causes road congestion, accidents, and (less important) pavement damage.

Ian W.H. Parry, Rick van der Ploeg, and Roberton Williams

Abstract

Market-based instruments like carbon taxes are potentially the most effective policies for reducing energy-related CO2 emissions. They do this by cutting the demand for fossil fuels and making it more attractive to use zero-carbon fuels like renewables.

International Monetary Fund. Research Dept.

Abstract

The authors of this chapter are Francesca Caselli, Francesco Grigoli (co-lead), Weicheng Lian, and Damiano Sandri (co-lead), with support from Jungjin Lee and Xiaohui Sun. The chapter benefited from insightful comments by Yuriy Gorodnichenko and internal seminar participants.

Valentina Bosetti, Carlo Carraro, Sergey Paltsev, and John Reilly

Abstract

Without significant emissions mitigation actions, projected “likely” global atmospheric temperature increases by the end of the century are approximately 2.5° C to 6.5° C above preindustrial levels.