In Conversation with Karten Neuhoff: A Climate Contribution to Complement EU ETS on the Path to Climate Neutrality
11 November, 1:30 PM – 2:00 PM (CET)
Production of materials is a major source of carbon emissions, thus emissions from the materials sector will need to drastically reduce for jurisdictions around the world to meet their commitments on climate change. A high and consistent carbon price can be a key policy tool, as carbon pricing can make carbon-intensive inputs more expensive as well as incentivize a shift towards low-carbon alternatives. However, pricing carbon can also lead to higher costs that put domestic industrial producers at a competitive disadvantage and shift emissions abroad. The resulting leakage concerns require leakage protection measures that are consistent with the deep decarbonization challenge.
One such approach is a consumption charge, which aims to restore the carbon price for materials along the value chain. No jurisdiction has implemented consumption charges on carbon-intensive industrial materials, but consumption charges have been implemented on other emissions-intensive activities or products, such as fossil fuels and electricity generation. This session will examine consumption charges in detail and how they differ from border carbon adjustment mechanisms. ICAP’s William Acworth will interview Karsten Neuhoff, lead of the Climate Policy Department at the German Institute for Economic Research (DIW Berlin) and lead of Inclusion of Consumption project.
In conversation with:
Karsten Neuhoff, DIW, lead of the Climate Policy Department at the German Institute for Economic Research (DIW Berlin) and lead author on the paper ‘Inclusion of Consumption of carbon intensive materials in emissions trading – An option for carbon pricing post-2020’.