Study on the best international and European experience in effective use of carbon revenues

What is the best international and European experience regarding the effective use of carbon revenues, and how do different jurisdictions turn them into lasting public value?

This background study reviews international experience in designing carbon pricing instruments, with a focus on the EU ETS and similar systems. Designed to inform policymakers and practitioners about lessons learned in carbon revenue use, the study presents a four-step framework for effective revenue management. Additionally, the analysis compares the purposes to which carbon revenues are directed, the institutional channels through which they flow, the governance arrangements that ensure they fulfil those purposes, and the transparency and evaluation practices that sustain public support. The conclusions highlight the findings most relevant to jurisdictions currently designing their carbon revenue systems.

The study was prepared by the Ukrainian Climate Office (UCO) with expert inputs from Berlin Economics GmbH. The Ukrainian Climate Office is co-financed by the German Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN) and European Union, and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).