This online event investigates ways to introduce carbon pricing in developing countries. Carbon pricing is widely accepted as the most effective and efficient policy to reduce carbon emissions. Yet many countries, in particular in the Global South, face political and economic constraints when introducing carbon pricing. This workshop deals with ways to overcome these constraints. First, it explores how the acceptability of carbon pricing can be improved, such as through gradual implementation and complementary social policies. Second, it explores to what extent policy-based finance, which includes loans and grants supplied conditional on policy reforms, could help to both ease the fiscal constraints and support the willingness for reform.

To explore how carbon pricing could be best introduced, this event brings together researchers, policy makers and development bank practitioners. During the first part of the event, the German Development Institute presents new research on how political economy factors shape the implementation of carbon pricing in Vietnam and how social policies support the introduction of carbon pricing in Peru. In the second part, the World Bank and KfW explore, by means of case study evidence, the potential for policy-based finance to introduce carbon pricing. The event closes with a discussion of the presented results and its implications for development policy.

Programme

Introduction

German Ministry for Economic Cooperation and Development (tbc)

Lectures

The Political Economy of Carbon Taxation: Evidence from Vietnam

• Kasper Vrolijk,German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

Social Policies and Carbon Pricing Implementation: An Empirical Analysis of Peru

• Daniele Malerba, DIE)

Promoting Carbon Pricing through Policy-based Finance

• Dirk Heine, World Bank (tbc)

The Potential and Limitations of Policy-based Finance for Carbon Pricing

• Peter Hilliges, KfW

Discussion

Moderation

• Anna Pegels, DIE