Science article "Building a scalable climate coalition for heavy industry”
In an article in Science, the world’s top general research journal, the case is laid out for a climate coalition for heavy industry. It is written by a group of researchers from around the world, dubbed the Global Climate Policy Project Working Group on Climate Coalitions. An earlier, detailed report on the topic is here.
The initiative is led by Prof Catherine Wolfram of MIT. CCEP director Frank Jotzo is a member and co-author, and will represent the group at the upcoming Open Coalition on Compliance Carbon Markets' 2nd High-level Meeting and Conference in Wuhan.
Abstract: The important interaction between trade and climate policy has sharpened the case for a coalition of countries that com-mit to price industrial emissions at home and use border adjustments to apply a carbon price to imports from non-members. We propose a coalition that initially targets four emissions-intensive industries—iron and steel, aluminum, cement, and nitrogen fertilizers (hereafter, fertilizers)—which together account for roughly 20% of global greenhouse gas (GHG) emissions. Using plant-level microdata and trade modeling, we examine two institutional designs that have emerged in policy discussions: a uniform price regime with a common carbon price floor and a graduated price regime withincome-tiered floors. We show that a first-wave coalition could cut global GHG emissions by roughly 1.5% [2.0% of carbon dioxide (CO2)emissions] relative to 2023 levels while keeping industrial output impacts small, limiting leakage, and raising almost $200 billion per year in public revenues.
Author list:
Catherine Wolfram, Joseph Aldy, Candido Bracher, Gregory Casey, Vaibhav Chaturvedi, Kimberly Clausing, Carolyn Fischer, Christian Gollier, Allan Hsiao, Frank Jotzo, Marcelo Medeiros, Kyle Meng, Athiphat Muthitacharoen, Axel Ockenfels, Mari Pangestu, Marilyn Pereboom, Arathi Rao, Ivan Rudik, Daouda Sembene, Naomi Shimberg, E. Somanathan, Dustin Tingley, Jennifer Winter.