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Implementing the United States’ Domestic and International Climate Mitigation Goals: A Supportive Fiscal Policy Approach
Author:
Ian W.H. Parrynull

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Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 057
Language:
English
Publication Date:
03 Mar 2021
DOI:
https://doi.org/10.5089/9781513571003.001
ISBN:
9781513571003
ISSN:
1018-5941
Pages:
39
Keywords:
Climate change; carbon neutrality; US climate mitigation; carbon pricing; feebates; carbon price floor; international aviation and maritime.; WP; efficiency cost o n; feebate variant; fuel economy; mitigation cost; international aviation and maritime; emission rate; sliding scale; cost increase; feebate scheme; Carbon tax; Greenhouse gas emissions; Non-renewable resources; Natural gas sector; Fuel prices; Global; Africa
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The United States has pledged to become carbon neutral by 2050, meet sectoral objectives (e.g., for carbon free power, electric vehicles) and encourage greater mitigation among large emitting countries and of international transportation emissions. Fiscal policies at the national, sectoral, and international level could play a critical role in implementing these objectives, along with investment, regulatory, and technology policies. Fiscal instruments are cost-effective, can enhance political acceptability, and do not worsen, or could help alleviate, budgetary pressures. Domestically, a fiscal policy package could contain a mix of economy-wide carbon pricing and revenue-neutral feebates (i.e., tax-subsidy schemes) with the latter reinforcing mitigation in the transport, power, industrial, building, forestry, and agricultural sectors. Internationally, a carbon price floor among large emitters (with flexibility to implement equivalent measures) could effectively scale up global mitigation, while levies/feebates offer a practical approach for reducing maritime and aviation emissions.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 2021: Issue 057