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Monetary policy currently has only limited room for manoeuvre to fight inflation. Structural supply problems, war and past omissions are having an impact. Inflation is hitting those hardest who cannot pass on the price increase. There is no evidence of a wage-price spiral in Germany at present. Raising the key interest rates now will not lead directly to a reduction in inflation. However, combining monetary policy with social and climate policy goals has great potential. It is a matter of having the courage to pursue a green monetary policy.

Carbon pricing has been hailed as an essential component of any sensible climate policy. Internalize the externalities, the logic goes, and polluters will change their behavior. The theory is elegant, but has carbon pricing worked in practice? Despite a voluminous literature on the topic, there are surprisingly few works that conduct an ex-post analysis, examining how carbon pricing has actually performed. This paper provides a meta-review of ex-post quantitative evaluations of carbon pricing policies around the world since 1990. Four findings stand out. First, though carbon pricing has dominated many political discussions of climate change, only 37 studies assess the actual effects of the policy on emissions reductions, and the vast majority of these are focused on Europe. Second, the majority of studies suggest that the aggregate reductions from carbon pricing on emissions are limited—generally between 0% and 2% per year. However, there is considerable variation across sectors. Third, in general, carbon taxes perform better than emissions trading schemes (ETSs). Finally, studies of the EU-ETS, the oldest ETS, indicate limited average annual reductions—ranging from 0% to 1.5% per annum. For comparison, the IPCC states that emissions must fall by 45% below 2010 levels by 2030 in order to limit warming to 1.5 °C—the goal set by the Paris Agreement (Intergovernmental Panel on Climate Change 2018). Overall, the evidence indicates that carbon pricing has a limited impact on emissions.

Enhanced silicate rock weathering (ERW), deployable with croplands, has potential use for atmospheric carbon dioxide (CO 2 ) removal (CDR), which is now necessary to mitigate anthropogenic climate change 1 . ERW also has possible co-benefits for improved food and soil security, and reduced ocean acidification 2 – 4 . Here we use an integrated performance modelling approach to make an initial techno-economic assessment for 2050, quantifying how CDR potential and costs vary among nations in relation to business-as-usual energy policies and policies consistent with limiting future warming to 2 degrees Celsius 5 . China, India, the USA and Brazil have great potential to help achieve average global CDR goals of 0.5 to 2 gigatonnes of carbon dioxide (CO 2 ) per year with extraction costs of approximately US$80–180 per tonne of CO 2 . These goals and costs are robust, regardless of future energy policies. Deployment within existing croplands offers opportunities to align agriculture and climate policy. However, success will depend upon overcoming political and social inertia to develop regulatory and incentive frameworks. We discuss the challenges and opportunities of ERW deployment, including the potential for excess industrial silicate materials (basalt mine overburden, concrete, and iron and steel slag) to obviate the need for new mining, as well as uncertainties in soil weathering rates and land–ocean transfer of weathered products. A detailed assessment of the techno-economic potential of enhanced rock weathering on croplands identifies national CO 2 removal potentials, costs and engineering challenges if it were to be scaled up to help meet ambitious global CO 2 removal targets.

In 2019, the German government decided to introduce a national system of emissions trading on transport and heating (nETS) starting on 1st January 2021. The policy design of the nETS was heavily criticized for being labelled as emissions trading while operating in its initial phase as CO2 tax. However, the question of policy design appears to have been rather neglected so far. Moreover, dynamics of the European multilevel system have been of significant importance. The threat of non-fulfillment of European sanctionequipped emission targets, as well as the perspective of a European rather than a national carbon pricing, received increasing attention. To capture the different causes behind policy design choice, the multi-factor Political Process-inherent Dynamics Approach (PIDA) is applied. In addition, the analysis draws on multilevel governance scholarship. The article seeks to contribute to the literature on policy design choice under the circumstances of climate change and multilevel governance. Im Jahr 2019 beschloss die deutsche Regierung, ab dem 1. Januar 2021 ein nationales Emissionshandelssystem für Verkehr und Wärme als Instrument des Klimaschutzes einzuführen. Die Ausgestaltung der nationalen CO2-Bepreisung wurde deutlich kritisiert, da das geschaffene System offiziell als Emissionshandel bezeichnet wurde, jedoch in der Anfangszeit im Sinne einer CO2-Steuer funktioniert. Der Frage nach den Hintergründen des Policy Designs wurde bisher jedoch wenig Aufmerksamkeit geschenkt. Eine besondere Rolle spielte nicht zuletzt die Einbettung des nationalen Entscheidungsverfahrens in das europäische Mehrebenensystem. Neben der drohenden Nichterfüllung europäischer Emissionsziele scheint die Perspektive einer europäischen statt einer nationalen CO2-Bepreisung den politischen Entscheidungsprozess beeinflusst zu haben. Um die verschiedenen Ursachen für die Wahl des Politikdesigns zu erfassen, wird auf den Ansatz eigendynamischer politischer Prozesse (AEP) zurückgegriffen sowie an die Multilevel Governance Forschung angeknüpft. Der Artikel soll einen Beitrag zum Verständnis der Politikgestaltung und Instrumentenwahl unter den Bedingungen des Klimawandels und des Mehrebenenregierens leisten.

Integrated assessment models (IAMs) have emerged as key tools for building and assessing long term climate mitigation scenarios. Due to their central role in the recent IPCC assessments, and international climate policy analyses more generally, and the high uncertainties related to future projections, IAMs have been critically assessed by scholars from different fields receiving various critiques ranging from adequacy of their methods to how their results are used and communicated. Although IAMs are conceptually diverse and evolved in very different directions, they tend to be criticised under the umbrella of ‘IAMs’. Here we first briefly summarise the IAM landscape and how models differ from each other. We then proceed to discuss six prominent critiques emerging from the recent literature, reflect and respond to them in the light of IAM diversity and ongoing work and suggest ways forward. The six critiques relate to (a) representation of heterogeneous actors in the models, (b) modelling of technology diffusion and dynamics, (c) representation of capital markets, (d) energy-economy feedbacks, (e) policy scenarios, and (f) interpretation and use of model results.

Despite the gravity of the climate threat, governments around the world have struggled to pass and implement climate policies. Today, politicians and advocates are championing a new idea: linking climate policy to other economic and social reforms. Will this approach generate greater public support for climate action? Here, we test this coalition-building strategy. Using two conjoint experiments on a representative sample of 2,476 Americans, we evaluate the marginal impact of 40 different climate, social, and economic policies on support for climate reforms. Overall, we find climate policy bundles that include social and economic reforms such as affordable housing, a $15 minimum wage, or a job guarantee increase US public support for climate mitigation. Clean energy standards, regardless of which technologies are included, also make climate policy more popular. Linking climate policy to economic and social issues is particularly effective at expanding climate policy support among people of color.

Land-use changes are critical for climate policy because native vegetation and soils store abundant carbon and their losses from agricultural expansion, together with emissions from agricultural production, contribute about 20 to 25 per cent of greenhouse gas emissions 1 , 2 . Most climate strategies require maintaining or increasing land-based carbon 3 while meeting food demands, which are expected to grow by more than 50 per cent by 2050 1 , 2 , 4 . A finite global land area implies that fulfilling these strategies requires increasing global land-use efficiency of both storing carbon and producing food. Yet measuring the efficiency of land-use changes from the perspective of greenhouse gas emissions is challenging, particularly when land outputs change, for example, from one food to another or from food to carbon storage in forests. Intuitively, if a hectare of land produces maize well and forest poorly, maize should be the more efficient use of land, and vice versa. However, quantifying this difference and the yields at which the balance changes requires a common metric that factors in different outputs, emissions from different agricultural inputs (such as fertilizer) and the different productive potentials of land due to physical factors such as rainfall or soils. Here we propose a carbon benefits index that measures how changes in the output types, output quantities and production processes of a hectare of land contribute to the global capacity to store carbon and to reduce total greenhouse gas emissions. This index does not evaluate biodiversity or other ecosystem values, which must be analysed separately. We apply the index to a range of land-use and consumption choices relevant to climate policy, such as reforesting pastures, biofuel production and diet changes. We find that these choices can have much greater implications for the climate than previously understood because standard methods for evaluating the effects of land use 4 – 11 on greenhouse gas emissions systematically underestimate the opportunity of land to store carbon if it is not used for agriculture. Evaluation of the efficiency of land-use changes and their effect on global carbon storage shows that several land-use and consumption choices relevant to climate policy have greater implications than previously thought.

This article assesses the environmental and economic efficiency of three different approaches to treat monitoring uncertainty in climate policy, namely prescribing uncertainty, setting minimum certainty thresholds and pricing uncertainty through a discount. Our model of the behavior of profit-maximizing agents demonstrates that under the simplest set of assumptions the regulator has no interest in reducing monitoring uncertainty. However, in the presence of information asymmetry, monitoring uncertainty may hamper the economic and environmental performance of climate policy due to adverse selection. In a mandatory policy, prescribing a reasonable level of uncertainty is preferable if the regulator has enough information to determine this level. For voluntary mechanisms, such as carbon offsets, allowing agents to set their own monitoring uncertainty below a maximum threshold or discounting carbon revenues in proportion to monitoring uncertainty are the best approaches for the regulator to mitigate the negative effects of information asymmetry. These conclusions are much more pronounced when agents do not accrue revenues from their mitigation action, other than carbon. Our analysis of monitoring uncertainty under information asymmetry, which results in heterogeneity in the agents’ benefits from abatement, generalizes the classical trade-off between production efficiency and information rents.

This article assesses the environmental and economic efficiency of three different approaches to treat monitoring uncertainty in climate policy, namely prescribing uncertainty, setting minimum certainty thresholds and pricing uncertainty through a discount. Our model of the behavior of profit-maximizing agents demonstrates that under the simplest set of assumptions the regulator has no interest in reducing monitoring uncertainty. However, in the presence of information asymmetry, monitoring uncertainty may hamper the economic and environmental performance of climate policy due to adverse selection. In a mandatory policy, prescribing a reasonable level of uncertainty is preferable if the regulator has enough information to determine this level. For voluntary mechanisms, such as carbon offsets, allowing agents to set their own monitoring uncertainty below a maximum threshold or discounting carbon revenues in proportion to monitoring uncertainty are the best approaches for the regulator to mitigate the negative effects of information asymmetry. These conclusions are much more pronounced when agents do not accrue revenues from their mitigation action, other than carbon. Our analysis of monitoring uncertainty under information asymmetry, which results in heterogeneity in the agents’ benefits from abatement, generalizes the classical trade-off between production efficiency and information rents.

Notwithstanding great progress in scientific and economic understanding of climate change, it has proven difficult to forge international agreements because of free-riding, as seen in the defunct Kyoto Protocol. This study examines the club as a model for international climate policy. Based on economic theory and empirical modeling, it finds that without sanctions against non-participants there are no stable coalitions other than those with minimal abatement. By contrast, a regime with small trade penalties on non-participants, a Climate Club, can induce a large stable coalition with high levels of abatement.