Supporting Energy Pricing Reform and Carbon Pricing Policies through Crediting

This project examined the role that policy crediting might play in increasing the ambition of energy pricing reform and carbon pricing policies.

The goal of the study was to determine whether there is a role for crediting in pricing reform efforts as a way to assist government in increasing their ambition. The two options explored were: (1) a policy being implemented which would not have existed without crediting and (2) a policy that exists or has been decided upon is made more stringent (i.e., its ambition is increased). The analysis presented three mechanism as feasible to use for crediting revenues with reference to "carbon economics": using credit revenues to buy allowances directly within the emissions trading system, using credit revenues to support abatement within the instrument, and using credit revenues to overcome barriers to effective implementation and operation.