Effective Carbon Rates
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CTP/TPS Tax and Environment Unit

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The data for ECR was processed in Q1 of 2021.

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Energy use data from IEA (2020), World Energy Statistics and Balances
IPCC emission factors
Emission coverage from Emission Trading System (ETS) registries
Effective carbon tax rates from OECD (2019), Taxing Energy Use
Emission permit prices from Energy Exchanges, ETS registries and the ICAP Carbon Price Viewer

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OECD and G20 excluding the Kingdom of Saudi Arabia.
In order to facilitate analysis and comparisons over time, historical data for OECD members have been provided over as long a period as possible, often even before a country became a member of the Organisation. Information on the membership dates of all OECD countries can be found at OECD Ratification Dates.

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The criteria for defining whether a certain tax or tradeable carbon permit is part of the ECR is whether its base is directly physically proportional to CO2 emissions (e.g., litres of diesel, or tonnes of coal) or not (e.g. kWh of electricity used). Only those taxes and permits that are directly physically proportional to CO2 emissions are part of the ECR, irrespective of the policy objectives for their introduction.

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The Effective Carbon Rates database shows ECRs for six economic sectors, namely: Road, Off-Road, Industry, Agriculture and Fisheries, Residential & Commercial, Electricity

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The Effective Carbon Rate (ECR) is the sum of taxes and tradeable permits that effectively put a price on carbon emissions. More precisely, the ECR consists of three components of the ECR – fuel excise taxes, carbon taxes and tradeable carbon emission permits.
The carbon pricing score answers the question how close countries are to price carbon in line with carbon costs. EUR 60 is a midpoint estimate for carbon costs in 2020, a low-end estimate for 2030. Pricing all emissions at least at EUR 60 in 2020 shows that a country is on a good track to reach the goals of the Paris Agreement to decarbonise by mid-century economically.
The share of emission priced above EUR Y per tonne of CO2 shows the share of emissions within a country or sector with a carbon price that exceed EUR Y in percent.

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The direct physical proportionality of the tax or permit base to CO2 has an important economic implication: Each component of the ECR makes low- and zero- carbon energy more competitive by increasing the price of high-carbon alternatives, encouraging energy users to curtail their use of high carbon energy and switch to low- or zero-carbon options. In other words, the ECR is a comprehensive indicator of existing prices on carbon emissions.

Effective Carbon RatesAbstract

Companion dataset to Effective Carbon Rates (ECR).
ECRs measures carbon pricing of CO2-emissions from energy use in 44 OECD and G20 countries, covering 80% of world emissions. The dataset provides a comprehensive view on carbon pricing, including fuel excise taxes, carbon taxes and tradable emission permit prices.
For additional information, see Effective Carbon Rates 2021.
Annex A of the first publication of Effective Carbon Rates (OECD, 2016) provides a detailed description of the methodology for calculating ECRs.

Effective Carbon Rates 2021https://www.oecd-ilibrary.org/taxation/effective-carbon-rates-2021_0e8e24f5-enEffective Carbon Rates (OECD, 2016)https://www.oecd.org/tax/effective-carbon-rates-9789264260115-en.htm
Contact person/organisation

CTP/TPS Tax and Environment Unit

Data source(s) used

Energy use data from IEA (2020), World Energy Statistics and Balances
IPCC emission factors
Emission coverage from Emission Trading System (ETS) registries
Effective carbon tax rates from OECD (2019), Taxing Energy Use
Emission permit prices from Energy Exchanges, ETS registries and the ICAP Carbon Price Viewer

Date last input received

The data for ECR was processed in Q1 of 2021.

Unit of measure used

Percent

Base period

For comparing across time and countries, effective carbon rates have been converted to 2018 prices using OECD inflation data and exchange rates. Tax rates, permit prices and CO2 emissions refer to the same base year.

Date last updated

21/01/2021

Contact person

CTP Tax and Environment Unit

Geographic coverage

OECD and G20 excluding the Kingdom of Saudi Arabia.
In order to facilitate analysis and comparisons over time, historical data for OECD members have been provided over as long a period as possible, often even before a country became a member of the Organisation. Information on the membership dates of all OECD countries can be found at OECD Ratification Dates.

Sector coverage

The Effective Carbon Rates database shows ECRs for six economic sectors, namely: Road, Off-Road, Industry, Agriculture and Fisheries, Residential & Commercial, Electricity

Product coverage

The Effective Carbon Rates database reports results including emissions from the combustion of biomass as well as results excluding emissions from the combustion of biomass. Annex 3.A of Effective Carbon Rates 2018 discusses the implications of the combustion approach and considers evidence on lifecycle emissions of biofuels. It also discusses why emission bases from Effective Carbon Rates are not directly comparable with UNFCCC inventories.

Effective Carbon Rates 2018http://www.oecd.org/tax/effective-carbon-rates-2018-9789264305304-en.htm
Other coverage

The criteria for defining whether a certain tax or tradeable carbon permit is part of the ECR is whether its base is directly physically proportional to CO2 emissions (e.g., litres of diesel, or tonnes of coal) or not (e.g. kWh of electricity used). Only those taxes and permits that are directly physically proportional to CO2 emissions are part of the ECR, irrespective of the policy objectives for their introduction.

Key statistical concept

The Effective Carbon Rate (ECR) is the sum of taxes and tradeable permits that effectively put a price on carbon emissions. More precisely, the ECR consists of three components of the ECR – fuel excise taxes, carbon taxes and tradeable carbon emission permits.
The carbon pricing score answers the question how close countries are to price carbon in line with carbon costs. EUR 60 is a midpoint estimate for carbon costs in 2020, a low-end estimate for 2030. Pricing all emissions at least at EUR 60 in 2020 shows that a country is on a good track to reach the goals of the Paris Agreement to decarbonise by mid-century economically.
The share of emission priced above EUR Y per tonne of CO2 shows the share of emissions within a country or sector with a carbon price that exceed EUR Y in percent.

Recommended uses and limitations

The direct physical proportionality of the tax or permit base to CO2 has an important economic implication: Each component of the ECR makes low- and zero- carbon energy more competitive by increasing the price of high-carbon alternatives, encouraging energy users to curtail their use of high carbon energy and switch to low- or zero-carbon options. In other words, the ECR is a comprehensive indicator of existing prices on carbon emissions.