Average effective carbon rate (ECR) on energy-related CO₂ emissions

The Effective Carbon Rate (ECR) measures how strongly a country prices carbon emissions from energy use by combining three policy instruments into one comparable figure: explicit carbon taxes, emissions trading system (ETS) permit prices, and fuel excise taxes (net of subsidies) expressed per tonne of CO₂. Because it includes fuel taxes (which exist in many countries even without a formal carbon price), ECR often reveals that many economies already price some emissions—while others leave most emissions effectively unpriced.

This statistic is interesting because it captures the “real-world” carbon price signal faced by households and firms across the energy system, not just the headline ETS or carbon-tax rate. It also highlights big cross-country differences driven by transport fuel taxation, coverage of ETS/carbon taxes, and fossil-fuel subsidy structures. Higher ECRs generally strengthen incentives to shift to efficiency and low-carbon energy, but they can also reflect broader fiscal choices (e.g., long-standing fuel excises) rather than climate policy alone.