New research puts climate and carbon tax policies to the test

Do climate policies work? An international research team found only 19 per cent of climate policies have been successful over the past two decades. The groundbreaking study published in Science reveals the keys to success according to shared characteristics for these cases: inclusion of tax and price incentives in well-designed policy mixes.

“The methods we used in this study were originally developed at UVic and first applied to evaluate the effects of the BC carbon tax,” says Felix Pretis, an economics associate professor with the University of Victoria and study co-author. “Rather than assessing isolated policies on their own, we search for significant drops in emissions and then aim to link those reductions to possible policies implemented at the time.”

Here’s an excerpt from the report:

“Meeting the Paris Agreement’s climate targets necessitates better knowledge about which climate policies work in reducing emissions at the necessary scale. We provide a global, systematic ex post evaluation to identify policy combinations that have led to large emission reductions out of 1500 climate policies implemented between 1998 and 2022 across 41 countries from six continents.

Our approach integrates a comprehensive climate policy database with a machine learning–based extension of the common difference-in-differences approach. We identified 63 successful policy interventions with total emission reductions between 0.6 billion and 1.8 billion metric tonnes CO₂. Our insights on effective but rarely studied policy combinations highlight the important role of price-based instruments in well-designed policy mixes and the policy efforts necessary for closing the emissions gap.”

An accompanying website, the Climate Policy Explorer, offers a comprehensive and interactive overview of the results, analysis and methods. The site is available to the public.

“This knowledge is vital for supporting policymakers and society in the transition to climate neutrality,” says lead author Annika Stechemesser, Potsdam Institute for Climate Impact Research.

For further information, click here. 

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