How governments address climate change through carbon pricing intensity

Abtract Carbon pricing policies are central climate policy instruments to limit global warming, but the instrument design in terms of price and emission coverage varies widely. Governments can set instrument designs that essentially make carbon pricing ineffective. To understand when serious measures against climate change are taken, we need to go beyond the question of which governments price carbon and focus on the specific design of the implemented instruments. Based on the literature of partisan theory in the context of climate policy, I analyze 21 OECD countries with implemented carbon pricing policies between 1990 and 2022. Results indicate that the government’s position constitutes a decisive element for climate policy measures in addition to institutional frameworks, economic conditions and situational pressures that can limit or expand a government’s ability to act. The structure of the temporal delay, though, is of central importance for policy analyses using first difference estimation.