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Mobilizing domestic resources for the Agenda 2030 via carbon pricing

Nature Sustainabilityvolume 1pages350357 (2018) | Download Citation

Abstract

The twenty-first century is characterized by an underprovision of basic public goods, such as public health, education, infrastructure and so on, and an overuse of the atmosphere as disposal space for greenhouse gases. Carbon pricing could address both problems simultaneously: a transition from negative carbon prices (fossil fuel subsidies) to positive levels could generate revenues to finance progress towards the Sustainable Development Goals. Given the scarcity of private sources of finance in many lower-income countries, carbon pricing could be a particularly attractive policy option. Our analysis identifies countries where domestic revenues from carbon pricing consistent with the 2 °C target could contribute substantially to financing the Sustainable Development Goals.

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Acknowledgements

We thank U. Weddige and A. Marxen for support with visualizing data, G. Schmidt-Traub, B. Wils, G. Hutton and J. Lim for support with the data, T. Hausotter of the German Federal Enterprise for International Cooperation (GIZ) for comments on an early draft of the paper, and A. Churiakova for research assistance. M.F. gratefully acknowledges funding by the German Federal Enterprise for International Cooperation (GIZ) GmbH on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) for the initial phase of this study under the project CAPRI-SD. K.L. gratefully acknowledges funding from the German Federal Ministry of Education and Research (BMBF) as part of grant 01LN1703A.

Author information

Affiliations

  1. Potsdam Institute for Climate Impact Research (PIK), Member of the Leibniz Association, Potsdam, Germany

    • Max Franks
    • , Kai Lessmann
    • , Jan Christoph Steckel
    •  & Ottmar Edenhofer
  2. Mercator Research Institute on Global Commons and Climate Change (MCC), Berlin, Germany

    • Kai Lessmann
    • , Michael Jakob
    • , Jan Christoph Steckel
    •  & Ottmar Edenhofer
  3. Technische Universität Berlin, Berlin, Germany

    • Jan Christoph Steckel
    •  & Ottmar Edenhofer

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Contributions

All authors conceived the project. M.F. constructed the dataset with input from M.J. and K.L. M.F. and K.L. analysed the data, with input from M.J. and J.C.S. M.F., K.L., M.J. and J.C.S. wrote the paper with input from O.E.

Corresponding author

Correspondence to Max Franks.

Supplementary information

  1. Supplementary Information

    Supplementary Methods, Supplementary Table 1, Supplementary Figures 1–4, Supplementary References 1–21

  2. Dataset 1

    A data set that unifies: (a) the country-level data on SDG investment needs (based on the analytical framework introduced by Schmidt-Traub, 2015); (b) the country-level data on potential public revenues from climate policies (carbon pricing consistent with the 2 °C target and subsidy removal); and (c) the country-level data on total tax revenues as a fraction of GDP.

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DOI

https://doi.org/10.1038/s41893-018-0083-3