Gradually increasing the price of fossil fuels is considered a key element of effective climate policy – and yet it remains the subject of bitter controversy. In a new book, experts from the Potsdam Institute for Climate Impact Research (PIK) explain this concept and correct false perceptions. The publication (in German) is aimed at professionals and laypeople who want to gain a thorough understanding of the topic. It is available in print from Springer Gabler and can be downloaded free of charge as a PDF and e-book.
“We want to build bridges between the camps,” says PIK Director Ottmar Edenhofer, who co-authored the book with political scientist Cecilia Kilimann and economist Christopher Leisinger from his scientific staff. “We address the objections of those who, like us, want strong climate policy, but equate carbon pricing with blind faith in the market and the abandonment of government regulation. The finding of climate economics is that this is a misunderstanding. For pricing to reduce CO₂ emissions efficiently and without collateral damage, comprehensive government capacities and accompanying measures are needed.”
The publication presents the latest research findings from renowned journals, including several highly acclaimed articles by PIK and the Mercator Research Institute on Global Commons and Climate Change (MCC), which has been part of PIK since the beginning of 2025. Presented in an easy-to-understand format, the book corrects five popular misconceptions about carbon pricing as a core instrument of climate policy:
“The EU’s climate tariff system, which will come into effect at the beginning of 2026, will make carbon pricing even more important internationally,” concludes PIK Director Edenhofer. “In times of increasing geopolitical tensions, this will also become relevant to security policy because it will ultimately reduce the oil and gas revenues of authoritarian states such as Russia. The career of carbon pricing has only just begun. This book explains why that is a good thing.”
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