Large reductions in global emissions are needed for the world to be on track to meet global temperature goals. Asia-Pacific countries have a critical role in emissions reduction given their large and rising share in global emissions. This paper “Policy Options for Climate Change Mitigation: Emissions Trading Schemes in Asia-Pacific” by the International Monetary Fund discusses the main opportunities and behavioural responses for reducing emissions, and commonly used mitigation instruments.
It then considers key design issues for carbon pricing, with a focus on emissions trading schemes (ETS), describes measures to overcome the obstacles to carbon pricing, and discusses experiences with carbon pricing relevant for Asia-Pacific economies. Lastly, the paper covers complementary policy reforms, including reinforcing mitigation instruments, public investment, fuel tax reform, green industrial policies, and supporting reforms to the energy sector. Carbon pricing, including ETSs can be the centrepiece of climate mitigation strategies for most countries, particularly if ETSs are designed to mimic some of the administrative and economic attractions of carbon taxes and implemented appropriately.
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