Energy and Environment Research; Vol. 12, No. 1; 2022 ISSN 1927-0569 E-ISSN 1927-0577 Published by Canadian Center of Science and Education 1 Integrated Carbon Policy Design for Achieving Net-Zero Targets Abhijeet Acharya 1 1 College of Management and Technology, Walden University, Minnesota, USA Correspondence: Abhijeet Acharya, Walden University, Minnesota, USA. Received: December 4, 2021 Accepted: January 7, 2022 Online Published: January 10, 2022 doi:10.5539/eer.v12n1p1 URL: https://doi.org/10.5539/eer.v12n1p1 Abstract Several countries have set net-zero targets, and many more will announce in the next few years. Countries have used carbon pricing as an instrument to cut Greenhouse Gas (GHG) emissions and provide a price signal to attract private investments to achieve net-zero targets. However, current carbon policy in countries with net-zero targets remains inadequate and asymmetrical to overcome net-zero challenges; there are visible gaps in the carbon price level, sectoral coverage, and mechanism to reward carbon-neutral initiatives. This paper proposed an integrated carbon policy design covering economic, technical, and social dimensions and discussed how an integrated policy design approach could be effective in helping countries achieve net-zero objectives. The paper makes recommendations for net-zero policymakers. First, a stable and appropriate carbon price must be in place to attract private investments in carbon offset measures and commercialize clean technologies. Second, governments should use an effective revenue recycling mechanism to engage firms and citizens in mitigating the side effects of the carbon price regime and win their trust. Third, countries should promote behavioral changes and carbon footprint reduction measures through citizen participation. Keywords: carbon price, carbon tax, clean technologies, citizen engagement, net-zero, revenue recycle 1. Introduction 1.1 Background Scientists and economists agree that climate change resulted from the industrial revolution when firms released GHG into the atmosphere without being held responsible for the negative impact on the environment. Therefore, one way to curb GHG emissions is to impose a reasonable carbon price on emissions. With effective carbon prices, firms can be made accountable for the social cost and environmental damage arising from their production-related emissions (Burke, Byrnes & Fankhauser, 2019; Stöllinger, 2020). According to OECD (2021), carbon pricing can be an effective decarbonization policy if adequately designed. Supporting a fair carbon price can make renewable energy more competitive than high-carbon energy sources and provide certainty for investors willing to invest in clean and emission abetment technologies. Nordic countries Finland, Sweden, Norway, Denmark implemented carbon policy in the 1990s, followed by central European countries like Switzerland, Slovenia, Estonia, and Canadian provinces of Alberta and British Columbia in the 2000s (World Bank, 2020). However, the current reality of carbon policy implementation is not encouraging; out of 190 countries pledged to the Paris agreement, only 46 nations and 26 subnational jurisdictions have implemented carbon policy which covers just 22% of global GHG emissions (World Bank, 2020). Curbing GHG emissions through higher carbon prices can be difficult for political decision-makers; however, it is possible to design a carbon policy that is effective and acceptable to society (Burke et al., 2019). According to the World Bank (2020), the current level of the carbon price is substantially lower than those needed to be consistent with the Paris Agreement, the estimated carbon Prices of at least US$40–80/tCO2e by 2020 and US$50–100/tCO2e by 2030 are required to reduce emissions in line with the Paris Agreement. Further, IEA estimates a carbon price level of $63/tCO2e in 2025 and $140/tCO2ein 2040 must be in place to incentivize GHG reduction measures to achieve EU’s 2030 and 2050 targets (Barnes, 2021). In recent years the issues related to carbon policy design have gained momentum; however, the effectiveness of carbon policy design depends on several factors. According to Barnes (2021), the key elements of effective carbon policy design are a) carbon price level, b) scope and coverage, c) existence of different carbon prices and schemes within a country, d) carbon leakage, and e) credibility of policy design. With many countries moving away from renewable energy subsidies, clean technology must be linked to the carbon market to remain viable and self-sustaining (Edenhofer et al., 2021). An