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Cristian Alonso and Mr. Joey Kilpatrick
While a carbon tax is widely acknowledged as an efficient policy to mitigate climate change, adoption has lagged. Part of the challenge resides in the distributional implications of a carbon tax and a belief that it tends to be regressive. Even when not regressive, poor households could be hurt by a carbon tax, particularly in countries that rely heavily on carbon-intensive energy sources. Using household surveys, we study how a carbon tax may affect households in the Asia Pacific region, the main source of CO2 emissions. We document a wide range of country-specific policies that could be implemented to compensate households, reduce inequality, and build support for adoption.
International Monetary Fund. European Dept.

Sectors in Total GHG Emission, 2019 9. Electricity Production by Sources of Energy, 2019 10. ETS Prices, 2008–2022 11. GHG Emissions Projections, 2020–30 12. GHG Emissions Projection for Transport, 2019–30 13. Environment Tax Revenues, 2019 14. Carbon Price Assessment Tool Simulation Results for EUR50 per ton of C02 eq. Carbon Tax by 2027, 2020–35 15. Relative Mean Consumption Effect of EUR30 per ton C02 Eq. Carbon Tax, 2025 APPENDIX I. Alternative Estimate of Distributional Impact of Carbon Tax References

Mr. Simon Black, Koralai Kirabaeva, Ian W.H. Parry, Mr. Mehdi Raissi, and Karlygash Zhunussova

Emissions from Extractives F. Forestry G. Agriculture V. Transition Policies A. Distributional Incidence of Carbon Pricing and Use of Revenues B. Worker and Regional Assistance C. Addressing the Industrial Competitiveness Impacts of Carbon Pricing VI. Investment Needs For Clean Energy Transition And Supporting Policies A. Investment Needs for Clean Energy Transition VII. Summary References Annex A. Carbon Pricing Assessment Tool (CPAT) Annex B. Design Choices for BCAs and How They Affect Multiple Objectives: A Summary Annex C

International Monetary Fund. Middle East and Central Asia Dept.

(50 percent) followed by gas (20 percent). Renewable sources contributed only 3 percent in 2020. Coal production generates significant employment, concentrated in few areas, which would be most affected by a shift away from coal. GHG Emissions by Sector, 2020 (Percent of total emissions) Sources: Global Carbon Project, IMF Carbon Pricing Assessment Tool (CPAT) C02 Emissions per Capita, 2020 (Metric tons) Source: Global Carbon Project 5. The shift to a low-carbon global economy increases the urgency for Kazakhstan to transition to a greener

Cristian Alonso and Mr. Joey Kilpatrick

Langsung Tunai/Bantuan Langsung Sementara Masyarakat BSM Bantuan Siswa Miskin CPAT Carbon Pricing Assessment Tool ETS Emissions Trading SystemScheme GDP Gross Domestic Product GHG Green House Gas Hong Kong SAR Hong Kong, Special Administrative Region IEA International Energy Agency IMF International Monetary Fund LPG Liquefied Petroleum Gas NDC Nationally Determined Contributions OECD Organization for Economic Cooperation and Development PKPS BBM Dalam Pencapaian Efektivitas

Ian Parry and Karlygash Zhunussova

. “ CAIT Country GHG Emissions Database.” 2021 . Annex This annex discusses broader sources of GHGs, describes the Carbon Pricing Assessment Tool (CPAT) tool used for the quantitative analyses in this note and presents various supplementary tables and figures. Broader Sources of GHGs CO 2 is the largest among the long-lived climate pollutants and most analyses of climate mitigation focus on this gas . 35 Other GHGs have varying levels of warming potential

International Monetary Fund. Western Hemisphere Dept.

of the world economy with a high spatial 1×1-degree resolution to determine the impact of temperature changes in productivity and amenities depending on local temperatures (cf. Alvarez and Rossi-Hansberg 2021 ) in Ecuador, and Colombia and Peru for comparison and range validation. The IMF’s Carbon Pricing Assessment Tool (CPAT) allows for the estimation of various impacts of policies to accelerate green transitions, notably carbon pricing, on various metrics, including distributional impacts (see upcoming WHD REO for application to selected Latin American

International Monetary Fund. Asia and Pacific Dept

such as job loss or loss of competitiveness. Energy related GHG Emission, 2022–2030 (In metric ton C02e) Source:IMF Carbon Pricing Assessment Tool (CPAT). Note: The 60/30/10 are pledges of AEs/EMHIs/EMLIs to reduce their collective GHGs below BAU levels in 2030. 7. A Carbon user fee can raise additional and predictable fiscal revenue to achieve adaptation goals and pay for just transition costs . A US$25 carbon fee on the energy sector can bring a gradual increase in additional revenue, amounting to 0.48 percent of GDP on an annual basis by 2030