Carbon Pricing: Design, Experiences and Issues, edited by LarryKreiser, MikaelAndersen, BirgitteOlsen, StefanSpeck, JanetMilne and HopeAshiabor. Published by Edward Elgar Publishing, Cheltenham, UK, 2015, 256 pages. ISBN: 9781785360220, ₤75.

The worldwide slowdown of economic growth along with the decline of fossil fuel prices is making the promotion of energy efficiency more challenging. However, increasing international concern with climate change issues, particularly after the 2015 Climate Change Conference in Paris, provides an impetus for exploring avenues to reduce the use of fossil fuels. With this background in place, lessons about carbon pricing are of critical significance for many countries, and are the main motivation of this book; a collection of papers focusing on carbon pricing design, experiences and related issues. Carbon Pricing: Design, Experiences and Issues illustrates how different forms of carbon pricing mechanisms play out in terms of economic, environmental and social effects. The challenges of international linkages between carbon markets and leakage of carbon emissions are also examined. This book is divided into three parts comprising 14 chapters. Part one provides a comprehensive overview of carbon tax and Emissions Trading Scheme (ETS) experiences in different regions. Part two focuses on energy and excise taxes, while Part three reflects on policy choices to reduce GHG emissions. Part one, consisting of seven chapters, begins with an introduction of carbon tax experience in British Columbia (BC); describing the structure of the tax and its performance in encouraging lower fossil fuel consumption. Chapter 2 revisits BC's carbon tax in a comparative study that contrasts the costs of enforcing BC's carbon tax and Quebec's ETS. The authors conclude that carbon taxes are considerably less costly than ETSs, largely because the institutional infrastructure for tax collection, administration and enforcement is usually pre-existing. Chapter 3 examines legal obstacles to linking ETS systems that have different designs. The authors discuss, for example, the challenges in linking an ETS with a reserve price auction system in place to an ETS that does not have such a reserve price. The next chapters compare the German and Japanese ecological tax reform/carbon tax policy processes in Chapter 4, the design of phase 3 of the EU ETS is compared to previous EU ETS trading periods, and global emission pathways consistent with the 2°C target, national emission pathways and gradual climate justice. Finally, Chapter 7 explains the impacts of carbon tariffs – which would be charged by countries with a carbon pricing regulation on imports from nontaxing countries – on developing countries. The four chapters in Part two focus on energy and excise taxes – similarly common measures used to address climate change issues. Chapter 8 proposes applying environmentally differentiated value added tax rates (i.e. green VAT) as an instrument to support the transition to a low-carbon and resource-efficient economy. Chapter 9 examines the impacts of climate and energy policies on Austria's energy demand and climate mitigation in the long term. Subsequently, taking Milan's experience as a case, Chapter 10 investigates how urban road pricing affects congestion reduction, public transportation and air quality. Chapter 11 empirically evaluates the impacts of harmonisation of motor fuel taxes on fuel consumption, tax revenue and the resulting carbon emissions in the open economies of Central Europe, taking into account international tax competition. It is shown that an increase in fuel tax rates will increase tax revenue and can reduce fuel consumption and carbon emissions. Moreover, it is important to reduce the discrepancy of fuel tax rates across countries to alleviate ‘fuel’. Part three reflects on policy choices in four chapters. In Chapter 12, the authors illustrate how a Delphi method can be applied to explore what alternative, carbon tax or emissions trading, would be an optimal policy for climate change mitigation in Australia. Chapter 14 describes a case study of proposed tax reforms in Spain, which faces serious economic challenges (such as high public debt and high unemployment rates). The authors of this chapter describe an ecological fiscal strategy that has limited impact on the real economy, that will affect employment positively, and that could meet environmental objectives. While there are some chapters in which jargon is used that is ill-defined (e.g. ‘carbon lock-in’ and ‘installation’ in Ch. 5), the book is generally well written in a straightforward manner that conveys useful information accessible to nonspecialists. The information on carbon pricing regimes provides a good reference for policy-makers working to address climate change issues and environmental problems. It is also accessible to, and of interest to, industry practitioners and academic researchers, particularly those concerned with the future path of carbon tax and/or the price of tradable permits. While the authors’ efforts are laudable, I feel that some things could be improved. I miss a conclusion chapter that summarises the success and failure of the cases examined. I would welcome some additional discussion about a future roadmap for carbon pricing, and on what strategies may be suitable for developing countries. In particular, this book could be enriched by including case studies of the two energy giants, China and India, where fossil fuels still account for over half of energy consumption and where carefully thought-through instruments for carbon pricing are scarcely employed.

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