Quasi-Experimental Evidence on Carbon Pricing
A growing literature suggests that carbon emissions are most efficiently reduced by carbon pricing. The evidence base on the effectiveness of market-based mechanisms, however, faces three key limitations: studies often (a) predict, rather than evaluate effects, (b) show large difference in findings, and (c) cannot always infer causal relations. Quasi-experimental studies can address these challenges by using variation in policies over time, space, or entities. This paper systematically reviews this new literature, outlines the benefits and caveats of quasi-experimental methodologies, and verifies the reliability and value of quasi-experimental estimates. The overall evidence base documents a causal effect between carbon pricing and emission reductions, with ambiguous effects on economic outcomes, and there are important gaps and inconsistencies. This review underscores that estimates should be interpreted with care because of: (a) inappropriate choice of method, (b) incorrect implementation of empirical analysis (e.g., violate identifying assumptions), and (c) data limitations. More cross-learning across studies and use of novel empirical strategies is needed to improve the empirical evidence base going forward.
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Format: | Journal Article biblioteca |
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Published by Oxford University Press on behalf of the World Bank
2023-03-29
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Subjects: | CARBON PRICING, EMPIRICAL EVIDENCE, POLICY IMPACT, QUASI-EXPERIMENTAL DESIGNS, |
Online Access: | https://openknowledge.worldbank.org/handle/10986/40253 |
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dig-okr-10986402532023-08-25T14:56:37Z Quasi-Experimental Evidence on Carbon Pricing Vrolijk, Kasper Sato, Misato CARBON PRICING EMPIRICAL EVIDENCE POLICY IMPACT QUASI-EXPERIMENTAL DESIGNS A growing literature suggests that carbon emissions are most efficiently reduced by carbon pricing. The evidence base on the effectiveness of market-based mechanisms, however, faces three key limitations: studies often (a) predict, rather than evaluate effects, (b) show large difference in findings, and (c) cannot always infer causal relations. Quasi-experimental studies can address these challenges by using variation in policies over time, space, or entities. This paper systematically reviews this new literature, outlines the benefits and caveats of quasi-experimental methodologies, and verifies the reliability and value of quasi-experimental estimates. The overall evidence base documents a causal effect between carbon pricing and emission reductions, with ambiguous effects on economic outcomes, and there are important gaps and inconsistencies. This review underscores that estimates should be interpreted with care because of: (a) inappropriate choice of method, (b) incorrect implementation of empirical analysis (e.g., violate identifying assumptions), and (c) data limitations. More cross-learning across studies and use of novel empirical strategies is needed to improve the empirical evidence base going forward. 2023-08-22T19:28:24Z 2023-08-22T19:28:24Z 2023-03-29 Journal Article The World Bank Research Observer 0257-3032 (print) 1564-6971 (online) https://openknowledge.worldbank.org/handle/10986/40253 en_US World Bank Research Observer CC BY 3.0 IGO World Bank https://creativecommons.org/licenses/by/3.0/igo/ application/pdf application/pdf Published by Oxford University Press on behalf of the World Bank |
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CARBON PRICING EMPIRICAL EVIDENCE POLICY IMPACT QUASI-EXPERIMENTAL DESIGNS CARBON PRICING EMPIRICAL EVIDENCE POLICY IMPACT QUASI-EXPERIMENTAL DESIGNS |
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CARBON PRICING EMPIRICAL EVIDENCE POLICY IMPACT QUASI-EXPERIMENTAL DESIGNS CARBON PRICING EMPIRICAL EVIDENCE POLICY IMPACT QUASI-EXPERIMENTAL DESIGNS Vrolijk, Kasper Sato, Misato Quasi-Experimental Evidence on Carbon Pricing |
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A growing literature suggests that carbon emissions are most efficiently reduced by carbon pricing. The evidence base on the effectiveness of market-based mechanisms, however, faces three key limitations: studies often (a) predict, rather than evaluate effects, (b) show large difference in findings, and (c) cannot always infer causal relations. Quasi-experimental studies can address these challenges by using variation in policies over time, space, or entities. This paper systematically reviews this new literature, outlines the benefits and caveats of quasi-experimental methodologies, and verifies the reliability and value of quasi-experimental estimates. The overall evidence base documents a causal effect between carbon pricing and emission reductions, with ambiguous effects on economic outcomes, and there are important gaps and inconsistencies. This review underscores that estimates should be interpreted with care because of: (a) inappropriate choice of method, (b) incorrect implementation of empirical analysis (e.g., violate identifying assumptions), and (c) data limitations. More cross-learning across studies and use of novel empirical strategies is needed to improve the empirical evidence base going forward. |
format |
Journal Article |
topic_facet |
CARBON PRICING EMPIRICAL EVIDENCE POLICY IMPACT QUASI-EXPERIMENTAL DESIGNS |
author |
Vrolijk, Kasper Sato, Misato |
author_facet |
Vrolijk, Kasper Sato, Misato |
author_sort |
Vrolijk, Kasper |
title |
Quasi-Experimental Evidence on Carbon Pricing |
title_short |
Quasi-Experimental Evidence on Carbon Pricing |
title_full |
Quasi-Experimental Evidence on Carbon Pricing |
title_fullStr |
Quasi-Experimental Evidence on Carbon Pricing |
title_full_unstemmed |
Quasi-Experimental Evidence on Carbon Pricing |
title_sort |
quasi-experimental evidence on carbon pricing |
publisher |
Published by Oxford University Press on behalf of the World Bank |
publishDate |
2023-03-29 |
url |
https://openknowledge.worldbank.org/handle/10986/40253 |
work_keys_str_mv |
AT vrolijkkasper quasiexperimentalevidenceoncarbonpricing AT satomisato quasiexperimentalevidenceoncarbonpricing |
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1775948688960520192 |