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How Carbon Pricing Impacts Economic Growth and Emissions Reduction
Subject area: Science,Engineering and Technology · Area of research: Science and Public Administration
Abstract
The international climate change mitigation movement depends heavily on carbon pricing because it enables an understanding of carbon emissions' environmental costs. The investigation analyzes the joint effects of carbon pricing on economic growth and emissions reduction by studying different regional and sectoral applications. The research examines carbon taxes and cap-and-trade systems as the main carbon pricing approaches that drive low-carbon innovation, market transformation, and climate goal achievement. An observational study of the European Union Emissions Trading System (EU ETS), British Columbia's carbon tax, and California's cap-and-trade program shows that these programs successfully reduced emissions without causing substantial economic instability. Despite their potential to reduce emissions and protect the economy, the policy faces political obstacles, such as economic disparities and carbon leakage risks that need modernized approaches and strengthened worldwide cooperation. The research proves that carbon pricing requires revenue recycling, fair implementation, and supportive policies to achieve maximum advantages. The effectiveness of carbon pricing in climate strategies requires solutions for technical, social, and economic obstacles to achieve a fair low-carbon economic transition.
Keywords
Carbon Pricing, Economic Growth, Emissions Reduction, Carbon Taxes, Cap-and-Trade Systems and Climate Policy
References
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How to cite this paper
@article{1707379,
author = {Ilyas Can Dogan, Li Xinlei},
title = {How Carbon Pricing Impacts Economic Growth and Emissions Reduction},
journal = {Iconic Research And Engineering Journals},
year = {2025},
volume = {8},
number = {9},
pages = {59-75},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1707379.pdf},
abstract = {The international climate change mitigation movement depends heavily on carbon pricing because it enables an understanding of carbon emissions' environmental costs. The investigation analyzes the joint effects of carbon pricing on economic growth and emissions reduction by studying different regional and sectoral applications. The research examines carbon taxes and cap-and-trade systems as the main carbon pricing approaches that drive low-carbon innovation, market transformation, and climate goal achievement. An observational study of the European Union Emissions Trading System (EU ETS), British Columbia's carbon tax, and California's cap-and-trade program shows that these programs successfully reduced emissions without causing substantial economic instability. Despite their potential to reduce emissions and protect the economy, the policy faces political obstacles, such as economic disparities and carbon leakage risks that need modernized approaches and strengthened worldwide cooperation. The research proves that carbon pricing requires revenue recycling, fair implementation, and supportive policies to achieve maximum advantages. The effectiveness of carbon pricing in climate strategies requires solutions for technical, social, and economic obstacles to achieve a fair low-carbon economic transition.},
keywords = {Carbon Pricing, Economic Growth, Emissions Reduction, Carbon Taxes, Cap-and-Trade Systems and Climate Policy},
month = {March},
}