“Effective Carbon Prices”, a new book from the OECD shows that taxes and emission trading systems are the cheapest way for societies to reduce CO2 emissions. The book estimates the costs to society of reducing CO2 emissions in 15 countries using a range of policy instruments. It finds wide variations in the costs of abating CO2 across all levels, including different types of policy instruments, sectors and countries. Market-based approaches like taxes and trading schemes are found to consistently reduce CO2 at a lower cost than other instruments, while capital subsidies and feed-in tariffs were found to be the most expensive ways of reducing emissions. The book can be accessed online at: http://www.oecd.org/env/tools-evaluation/carbon-prices.htm
