The EU Carbon Border Adjustment Mechanism (CBAM) came into force on 1 October 2023, introducing reporting requirements for importers of covered products and, from 2026, an obligation to pay a fee on the carbon content of imported goods. This paper uses indices of ad valorem tariffs to assess the...

We experimentally investigate how the timing of, and commitment to, an environmental regulation affects efficient technology adoption under emission taxes and tradable permits. An environmental regulator can either commit ex-ante to a specific policy level or ex-post to a rule on how to adjust...

Countries' current Nationally Determined Contributions (NDCs) under the Paris Agreement leave a substantial gap to the emissions reductions needed to limit global warming to 2°C. Böhringer et al. (2025) showed the large emissions reduction potential of global emissions trading even if...

Many administrations, including the EU and the US, have introduced substantial support policies for electrolytic hydrogen. However, interactions of such policies with existing climate policies remain poorly understood. Here, we combine an analytical and a numerical model to investigate the...

Novel Carbon Dioxide Removal (CDR) technologies have seen a first wave of deployment, driven by investments through voluntary carbon markets and by specific support policies. To sustain the momentum, a credible long-term policy path is urgently needed to lead removal technologies through the...

The generation of electricity and heat is the largest single activity covered by the EU Emissions Trading System (EU ETS). Due to the interconnectedness, the difference in the emission intensity of the different fuels and their configuration in a competitive marginal cost pricing market, power...

Iron and steelmaking is the industrial sector with the highest absolute CO2 emissions covered by the European Union Emissions Trading System (EU ETS). This report aims to describe key developments of the sector in the period from 2005 to 2019. It identifies key drivers behind the trends in...

Malaysia has made significant progress in improving its business environment to attract investment and boost productivity and competitiveness. This case study examines two pioneering initiatives - the E10 in Kulim, Kedah, and the Kulai Fast Lane (KFL) in Johor - that have streamlined the...

The Strategic Roadmap for Carbon Market and Climate Finance in the Forest Sector, tailored for each of the Congo Basin countries (Cameroon, Central African Republic, Democratic Republic of Congo, Equatorial Guinea, Gabon, and the Republic of Congo), provides a comprehensive, country-specific...

The Strategic Roadmap for Carbon Market and Climate Finance in the Forest Sector, tailored for each of the Congo Basin countries (Cameroon, Central African Republic, Democratic Republic of Congo, Equatorial Guinea, Gabon, and the Republic of Congo), provides a comprehensive, country-specific...

The Strategic Roadmap for Carbon Market and Climate Finance in the Forest Sector, tailored for each of the Congo Basin countries (Cameroon, Central African Republic, Democratic Republic of Congo, Equatorial Guinea, Gabon, and the Republic of Congo), provides a comprehensive, country-specific...

This study “Assessment and support for the preparation and development of roadmaps on climate finance and carbon markets for the forests of the Congo Basin” has been carried out under the umbrella of the World Bank’s Advisory Support and Analytics (ASA) initiative, 'Leveraging Natural...

This paper examines how income inequality affects environmental outcomes through the interplay of household consumption and political support for climate policy. We develop an agent-based model in which households differ by income, consumption patterns, and climate policy attitudes. Our results...

To address climate change and fulfill its international commitments to reducing carbon emissions, China has accelerated the low-carbon transformation of the thermal power sector through a carbon trading mechanism. However, as the "30·60″ dual-carbon target approaches, the carbon market still...

Financial markets and foreign investments could play an effective role in determining the environment and income of GCC resource-rich economies. Therefore, the effects of Financial Market Development (FMD) and Foreign Direct Investment (FDI) on Carbon Intensity (CI) from oil, gas, gas flaring,...

Sustainable aviation fuels (SAFs) are promising solutions for reducing carbon emissions in the aviation industry and achieving the 2050 net-zero target. Despite their environmental benefits, the adoption and deployment of SAFs remain significantly below expectations. This paper systematically...

This publication analyses the advantages and disadvantages of carbon credits compared to other financing instruments for protecting and restoring coastal ecosystems. Nine instruments are examined, including emission credits, biodiversity certificates, development cooperation, and blue bonds....

This report examines the risks and opportunities of using carbon crediting mechanisms to fund the protection and restoration of coastal ecosystems. It evaluates seven projects registered in the voluntary carbon market, focusing on key challenges related to integrity risks such as additionality,...

This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage (CDR) in permanent and non-permanent sinks. Non-permanent CDR reduces mitigation costs, even though the stored carbon is released into the atmosphere eventually. It may serve as...

The EU Emissions Trading System (EU ETS) leads to higher electricity prices and thus higher costs for electricity-intensive industries in the EU, reducing their competitiveness compared to those in non-EU countries. This disparity may result in carbon leakage, where production shifts abroad,...

Carbon leakage is a major concern in the design of unilateral climate policies aimed at reducing global emissions in a cost-effective manner. In order to assess the cost-effectiveness of anti-leakage measures, it is crucial to understand the fundamental mechanisms that contribute to leakage. We...

The study examines economic growth and climate change when system competition between countries causes drastic changes in their climate policies. The world is divided into two groups of countries: one that implements strict climate policies and another that refrains from doing so due to concerns...

This paper argues that current carbon accounting overlooks an important part of climate action: avoided emissions, or emissions that never occur because cleaner products, services, or decisions replace higher-carbon alternatives. While companies are increasingly developing solutions that reduce...

Firms' efforts to reduce pollution emissions in their production processes are induced by market forces as well as governmental regulatory instruments. The market forces, which might induce firms to increase production to maximize profits, work at cross-purposes. One of the common solutions is...

The EU Emissions Trading System (EU ETS) leads to higher electricity prices and thus higher costs for electricity-intensive industries in the EU, reducing their competitiveness compared to those in non-EU countries. This disparity may result in carbon leakage, where production shifts abroad,...

This paper examines the limits of corporate governance as a tool for advancing climate transition. While capital market mechanisms, shareholder stewardship, say-on-climate votes, and ESG-linked executive compensation are often presented as effective levers for greening corporate behavior, their...