Reducing greenhouse gas emissions to mitigate the worst effects of climate change is a global challenge. Various mitigation policies are available, though not all impose explicit carbon prices on businesses and households. While some policies such as carbon taxes or emissions trading schemes will involve explicit carbon prices others, such as direct regulation of technologies, renewable energy targets, or subsidies for low emissions technology, impose less transparent carbon prices. 

Given this, comparing the impact of different policies on a given sector across economies can be difficult as their scope can vary considerably and their impacts are not always clear. In this context it is important to develop a methodology for aggregating sectoral impacts across policies, and for making comparisons across key economies. Against this background, the Commission is requested to provide advice on the effective carbon prices that result from emissions reduction and other relevant policies in key economies, where effective carbon prices include both explicit carbon prices, such as taxes or emissions trading schemes, and implicit carbon prices.

The Australian Government commissioned this report to help it, and the Multi-Party Climate Change Committee, assess the extent to which key economies are taking action to address climate change. It provides a stocktake of the large number of policy measures in the electricity generation and road transport sectors of the countries studied. And it provides estimates of the burdens associated with these policies in each country and the abatement achieved. While the results are based on a robust methodology, data limitations have meant that some estimates could only be indicative.