Selected Issues Papers

Policies to Achieve Spain’s Climate Objectives: Spain

By Damien Capelle, Divya Kirti, Ana Lariau, Nicola Pierri, Ippei Shibata, German Villegas Bauer

June 13, 2025

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Format: Chicago

Damien Capelle, Divya Kirti, Ana Lariau, Nicola Pierri, Ippei Shibata, and German Villegas Bauer. "Policies to Achieve Spain’s Climate Objectives: Spain", Selected Issues Papers 2025, 079 (2025), accessed July 23, 2025, https://doi.org/10.5089/9798229015165.018

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Summary

Spain aims to cut greenhouse gas emissions, which implies further 30 percent cut from 2023 levels by 2030, requiring new measures beyond current efforts. Emission intensity varies widely across Spanish firms, offering potential for reductions by incentivizing laggards to match less-polluting peers. Relying mainly on public spending, like subsidies or investments, would be costly and insufficient. Carbon pricing is the most effective, cost-efficient, and fiscally attractive option, especially given Spain's limited fiscal space. The ongoing EU-ETS expansion could be complemented with domestic actions to enhance carbon pricing's role.

Subject: Carbon tax, Climate policy, Environment, Greenhouse gas emissions, Taxes

Keywords: Capital Vintages, Carbon tax, Climate policy, Emission heterogeneity, Emission intensity, Emissions, EU-ETS expansion, Europe, Firm level, Global, Greenhouse gas emissions, Lagging firm, Productivity, Spain National Climate Change, Spain's climate objective, Technology Adoption

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