During the Annual Conference of the European Association of Environmental and Resource Economists that was held in Bergen, Norway between 16 and 19 June 2025, Pietro Andreoni delivered a presentation entitled ‘The Role of Financing Externalities for Negative Emissions Market Design’.
The presentation tackled with the justification of distributional concerns stemming from the inequality impacts of rents by the separation of markets (prices) for removal and emissions.
In doing so, it provided the results of the study on numerical simulation with model calibrated in the European Union focusing on three policy settings characterized by unlimited non distortive and progressive taxation, progressive but distortive taxation reform and the lack of fiscal policy:
- Significant rents in a net-zero carbon market are a possibility.
- Rents might justify market separation to control CDR prices by up to 50%.
- Rents are higher the lower the availability of CDR.
- More research is needed to study the shape of the cost curves for removal.
EAERE_2025_Andreoni.pdf (1.7 MB)