Ian W Parry

International Monetary Fund, Fiscal Affairs Department, Principal Environmental Fiscal Policy Expert

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Ian Parry is the Principal Environmental Fiscal Policy Expert in the Climate Policy Division of the IMF’s Fiscal Affairs Department. He worked at Resources for the Future from 1995 to 2010 where he held the Allen Kneese Chair in Environmental Economics. He has a PhD in economics from the University of Chicago in 1993. Parry’s research focuses on country-level analysis of comprehensive mitigation strategies and their broader fiscal and economic impacts. Parry also quantifies the broader environmental (e.g., local air pollution) costs of fossil fuel use at the country level and efficient levels of fuel prices needed to reflect supply and environmental costs.

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Papers by Ian W Parry

Climate Mitigation Policy in Denmark: A Prototype for Other Countries

IMF Working Papers, Nov 12, 2020

Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 le... more Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark's mitigation strategy, pricing needs to be effective, address equity and leakage concerns, and be reinforced by additional measures at the sectoral level. The strategy Denmark develops can be a good prototype for others to follow. This paper discusses mechanisms to scale up domestic carbon pricing, compensate households, and possibly combine pricing with a border carbon adjustment. It also recommends the use of revenue-neutral feebate schemes to strengthen mitigation incentives, particularly for transportation and agriculture, fisheries and forestry, though these schemes could also be applied more widely.

format_quoteA $100 carbon price results in a manageable cost of 1.8% consumption burden for households, easily offset by other measures.format_quote

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International Fuel Tax Assessment

Gasoline and diesel fuel are heavily taxed in many developed and some emerging and developing cou... more Gasoline and diesel fuel are heavily taxed in many developed and some emerging and developing countries. Outside of the United States and Europe, however, there has been little attempt to quantify the external costs of vehicle use, so policymakers lack guidance on whether prevailing tax rates are economically efficient. This paper develops a general approach for estimating motor vehicle externalities, and hence corrective taxes on gasoline and diesel, based on pooling local data with extrapolations from U.S.evidence. The analysis is illustrated for the case of Chile, though it could be applied to other countries.

format_quoteExternal costs of trucks are higher than cars, with a corrective diesel tax estimated at $2.09 per gallon, reflecting road damage and congestion contributions.format_quote

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Reforming Energy Policy in India

Spreadsheet models are used to assess the environmental, fiscal, economic, and incidence effects ... more Spreadsheet models are used to assess the environmental, fiscal, economic, and incidence effects of a wide range of options for reducing fossil fuel use in India. Among the most effective options is ramping up the existing coal tax. Annually increasing the tax by INR 150 ($2.25) per ton of coal from 2017 to 2030 avoids over 270,000 air pollution deaths, raises revenue of 1 percent of GDP in 2030, reduces CO2 emissions 12 percent, and generates net economic benefits of approximately 1 percent of GDP. The policy is mildly progressive and (at least initially) imposes a relatively modest cost burden on industries.

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Climate Mitigation Policy in Denmark: A Prototype for Other Countries

Social Science Research Network, 2020

Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 le... more Denmark has a highly ambitious goal of reducing greenhouse gas emissions 70 percent below 1990 levels by 2030. While there is general agreement that carbon pricing should be the centerpiece of Denmark’s mitigation strategy, pricing needs to be effective, address equity and leakage concerns, and be reinforced by additional measures at the sectoral level. The strategy Denmark develops can be a good prototype for others to follow. This paper discusses mechanisms to scale up domestic carbon pricing, compensate households, and possibly combine pricing with a border carbon adjustment. It also recommends the use of revenue-neutral feebate schemes to strengthen mitigation incentives, particularly for transportation and agriculture, fisheries and forestry, though these schemes could also be applied more widely.

Public Expenditure Policy and the Environment

This is a Working Paper and the author would welcome any comments on the present text Citations s... more This is a Working Paper and the author would welcome any comments on the present text Citations should refer to a Working Paper of the International Monetary Fund, mentioning the author, and the date of issuance. The views expressed are those of the author and do not necessarily represent those of the Fund.