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A Taxonomy of Instruments to Reduce Greenhouse Gas Emissions and their Interactions

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  • Romain Duval

    (OECD)

Abstract

This paper reviews alternative (national and international) climate change mitigation policy instruments and interactions across them. Carbon taxes, cap-and-trade schemes, standards and technology-support policies (R&D and clean technology deployment) in particular are assessed according to three broad costeffectiveness criteria, their: i) static efficiency, defined to cover not just whether the instrument is costeffective per se but also whether it provides sufficient political incentives for wide adoption; ii) dynamic efficiency, which implies an efficient level of innovation and diffusion of clean technologies in order to lower future abatement costs; iii) ability to cope effectively with climate and economic uncertainties. Multiple market failures and political economy obstacles need to be addressed in order to meet these criteria. In this regard, carbon taxes or cap-and-trade schemes appear to perform better than alternatives. However, their cost-effectivenes can be enhanced through targeted use of other instruments. There is therefore room for climate policy packages. Une taxonomie des instruments de réduction des émissions de gaz à effet de serre et de leurs interactions Cet article passe en revue les différents instruments de politique économique (nationaux et internationaux) envisageables dans la lutte contre le changement climatique, ainsi que leurs interactions. Taxes carbone, marchés de permis négociables, standards et politiques de soutien au progrès technique (R&D et déploiement de technologies propres) en particulier sont évalués au regard de trois critères d’efficacité coût, à savoir: i) l'efficience statique, qui recouvre non seulement l’efficacité coût intrinsèque de l’instrument, mais aussi les incitations politiques à son adoption à grande échelle ; ii) l'efficience dynamique, impliquant un niveau efficient d’innovation et de diffusion des technologies propres permettant de réduire les coûts futurs de réduction des émissions ; iii) la capacité à s’adapter aux incertitudes climatiques et économiques. De multiples échecs de marché et obstacles relevant de l’économie politique doivent être surmontés pour vérifier ces critères. De ce point de vue, il apparaît que les taxes carbone et les marchés de permis négociables sont plus performants que les alternatives. Néanmoins, leur efficacité coût peut être améliorée par un usage ciblé des autres instruments. Il y a donc matière à la mise en place d’un éventail de politiques.

Suggested Citation

  • Romain Duval, 2008. "A Taxonomy of Instruments to Reduce Greenhouse Gas Emissions and their Interactions," OECD Economics Department Working Papers 636, OECD Publishing.
    • Handle: RePEc:oec:ecoaaa:636-en
    DOI: 10.1787/236846121450
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    Cited by:

    1. Tilmann Rave & Ursula Triebswetter & Johann Wackerbauer, 2013. "Koordination von Innovations-, Energie- und Umweltpolitik," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 61.
    2. Emily Tyler & Brent Cloete, 2015. "Combining price and quantity instruments: insights from South Africa," Climate Policy, Taylor & Francis Journals, vol. 15(3), pages 374-387, May.
    3. Sandra Batten & Stephen Millard, 2024. "Energy and Climate Policy in a DSGE Model of the United Kingdom," National Institute of Economic and Social Research (NIESR) Discussion Papers 553, National Institute of Economic and Social Research.
    4. Barragán-Beaud, Camila & Pizarro-Alonso, Amalia & Xylia, Maria & Syri, Sanna & Silveira, Semida, 2018. "Carbon tax or emissions trading? An analysis of economic and political feasibility of policy mechanisms for greenhouse gas emissions reduction in the Mexican power sector," Energy Policy, Elsevier, vol. 122(C), pages 287-299.
    5. Christoph Böhringer, 2014. "Two Decades of European Climate Policy: A Critical Appraisal," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 1-17, January.
    6. Pablo Ruiz Nápoles, 2014. "Macro Policies For Climate Change: Free Market Or State Intervention?," World Economic Review, World Economics Association, vol. 2014(3), pages 1-90, February.
    7. Jenny Lieu & Niki Artemis Spyridaki & Rocio Alvarez-Tinoco & Wytze Van der Gaast & Andreas Tuerk & Oscar Van Vliet, 2018. "Evaluating Consistency in Environmental Policy Mixes through Policy, Stakeholder, and Contextual Interactions," Sustainability, MDPI, vol. 10(6), pages 1-26, June.
    8. Svetlana Maslyuk & Dinusha Dharmaratna, 2011. "Comparative analysis of the existing and proposed ETS," Monash Economics Working Papers 15-11, Monash University, Department of Economics.
    9. EFI - Commission of Experts for Research and Innovation (ed.), 2013. "Research, innovation and technological performance in Germany - EFI Report 2013," Reports on Research, Innovation and Technological Performance in Germany, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin, volume 127, number 2013e, September.
    10. Lawrence Rothenberg, 2012. "The Political Economy of Climate Change," Chapters, in: Chin Hee Hahn & Sang-Hyop Lee & Kyoung-Soo Yoon (ed.), Responding to Climate Change, chapter 5, Edward Elgar Publishing.
    11. Verónica Gutman, 2017. "Economics and Climate Change: An economic analysis of mitigation decisions in Latin America," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 42(44), pages 11-36, july-dece.

    More about this item

    Keywords

    changement climatique; climate change; gaz à effet de serre; global warming; greenhouse gas; international climate policy; mitigation; politique climatique international; réchauffement climatique; réduction des émissions;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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