The Impact of Implementing a Consumption Charge on Carbon-Intensive Materials in Europe

Aufsätze referiert extern - Web of Science

Hector Pollitt, Karsten Neuhoff, Xinru Lin

In: Climate Policy 20 (2020), Suppl. 1, S. S74-S89


The production of basic materials accounts for around 25% of global greenhouse gas emissions. Existing measures to reduce emissions from industry are limited due to a combination of competitiveness concerns and a lack of technological options available to producers. In this paper, we assess the possibility of implementing a materials charge to reduce demand for basic industrial products and, hence, also reduce industrial emission levels. The modelling shows that a charge equivalent to around €80/tCO2 could reduce the EU’s total (energy plus process) CO2 emissions by up to 10% by 2050, depending on the substitution options available. The materials charge could lead to small GDP increases and a minor reduction in overall employment levels.

Karsten Neuhoff

Head of Department in the Climate Policy Department

Keywords: Resource efficiency incentives, carbon pricing, industrial policy, macroeconomic modelling
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