Fair and Effective Carbon Pricing in Austria

To solve the climate crisis, a fundamental decarbonisation of our economy is indispensable. In addition to technological changes, this requires accompanying climate policy measures, most importantly the pricing of carbon emissions. As this instrument leads to manifold indirect effects and uncertainties, FARECarbon employs a stakeholder-assisted multi model comparison of carbon pricing in Austria. In a nutshell, in FARECarbon concerted policy scenarios are simulated with different macroeconomic models, which are rooted in different economic theories, and a downstream microeconomic model of household demand. These simulations provide a sound basis for policymaking by illustrating the range of expected effects and related uncertainties, a so called “options space.” The close collaboration with stakeholders throughout the project on the one hand results in the definition of concerted policy scenarios and on the other hand ensures the integration of stakeholders‘ perspectives in the development of recommendations for carbon pricing in Austria. This process substantially enhances the policy-relevance of the outcomes.