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Putting a price on carbon: Reducing emissions

Although written to explore the impact on the USA of a national carbon price, this issue paper provides a useful and clear explanation of how carbon pricing leads to reduced emissions and investment in low carbon technology development and deployment, including from an economic perspective. The paper describes how and when emission reductions from a national carbon price are likely to take place in key sectors, showing for example that a strong carbon price will be transformative in the electricity sector, where systems are in place to shift production away from high carbon fuels when it becomes cost effective to do so, but more gradual in other sectors such as transport. This paper will be a useful resource for policymakers interested in how carbon pricing works.

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