Achieving zero emissions under a cap-and-trade system

Abstract

Highlights: Current estimates of marginal abatement costs suggest that achieving zero or net-zero emissions requires much higher carbon prices than ever experienced. Depending on how well they are addressed, competitiveness and distributional effects de facto pose a limit to the levels that carbon prices can reach. Steeply growing carbon prices and related side effects call for packages of accompanying measures and policies. This policy brief presents multiple policy options to keep carbon prices in check and achieve zero emissions in time.