Strategies for Climate Mitigation

Ian Parry is the Principal Environmental Fiscal Policy Expert in the Climate Policy Division of the IMF’s Fiscal Affairs Department.Simon Black is an Economist in the IMF’s Fiscal Affairs Department, where he specializes in climate change mitigation, carbon pricing, and environmental taxation.Nate Vernon-Lin is an Economist in the IMF’s Climate Policy Division, Fiscal Affairs Department.Karlygash Zhunussova is an Economist in the IMF’s Climate Policy Division, Fiscal Affairs Department.

• 1. Motivation for and Summary of the Volume 2. A Quick Primer on Climate Change 3. Choosing and Designing Mitigation Instruments: A First Look at Energy 4. A Closer Look at Emissions-Generating Sectors and Appropriate Policies 5. Understanding the Effects of Climate Mitigation Policies 6. Enhancing Acceptability of the Mitigation Strategy 7. Supporting Policies 8. Other Environmental Impacts: Implications for Fuel Pricing and Climate Mitigation 9. The Role of International Coordination 10. Conclusion: Dispelling 50 Myths about Climate Mitigation

“This publication underscores the vital importance of national mitigation strategies. Ambitious, 1.5°C-aligned national climate plans – covering all sectors and all greenhouse gases – are more critical than ever. Robust tracking of progress through Biennial Transparency Reports is also vital, to guide stronger policy-making, and to identify financing needs and investment opportunities – including through carbon markets under Article 6. Whole-of-government approaches, with meaningful engagement with sector leaders and other key stakeholders, are key to unlocking whole-of-society benefits: among them stronger growth and productivity, more jobs, less pollution and much lower health costs, and more secure and affordable energy. Helping all countries to seize these huge benefits is crucial. This new volume from the IMF is a valuable and timely contribution.” — Simon Stiell, Executive Secretary of the United Nations Framework Convention on Climate Change“This volume offers practitioners and scientists a clear framework for designing effective climate mitigation strategies. It shows how carbon pricing, reinforced by targeted sectoral policies, can align emission goals with economic efficiency, fairness, and political realism. For those advancing climate policy, this handbook provides an essential toolkit - to manage competitiveness, navigate distributional challenges, and foster international coordination towards global climate objectives.” — Ottmar Edenhofer, Potsdam Institute for Climate Impact Research, Technical University of Berlin, and Mercator Research Institute of Global Commons and Climate Change“Emissions of carbon dioxide and other greenhouse gases have been intricately woven into the fabric of economic activity for more than a century. Successfully addressing climate change requires pulling them out of this intricate weave while recognizing the fragilities of the fabric. No single policy is likely to be successful. The IMF has produced a much-needed guide for policymakers and stakeholders that helps balance the competing interests of cost-effectiveness, fairness, and feasibility. It highlights policy options across the economy, analytical tools to answer key questions, the importance of action, and the value of international cooperation. This book will be a valuable reference for anyone piecing together (or trying to understand) practical and effective national climate policy regimes.” — Billy Pizer, President and CEO, Resources for the Future“This is an extraordinary resource - a thorough, readable, well-organized, and well-documented survey of climate economics, with a focus on mitigation. The authors frame this as a valuable tool for policy makers, but I will certainly assign sections to my students. The final chapter on dispelling climate myths deserves to be widely circulated.” — Catherine Wolfram, William Barton Rogers Professor in Energy, MIT Sloan School of Management“The political, economic, and ethical challenges posed by climate change can be overwhelming. This outstanding book manages to address these challenges comprehensively while remaining highly readable. With close attention to recent empirical findings, it shows how using a combination of policy approaches can significantly mitigate climate change at relatively low cost while respecting concerns about fairness and political constraints. It is an exceptionally valuable reference for policy analysts, decisionmakers, university students, and others interested in finding solutions to the climate change problem.”— Lawrence H. Goulder, Shuzo Nishihara Professor of Environmental and Resource Economics, Emeritus, Stanford University