The EU Emissions Trading Scheme continues to exempt industries deemed at risk of carbon leakage from permit auctions. Carbon leakage risk is established based on the carbon intensity and trade exposure of each 4-digit industry. Using a novel measure of carbon leakage risk obtained in interviews...

How many instruments should be used to address a particular environmental problem? That is the question this article addresses. According to the "Tinbergen rule," one instrument per target is needed. The existence of any non-environmental market failures affecting the environmental problem at...

This paper looks at how contemporary environmental (including climate) policy problems are phrased in terms of effectiveness, efficiency, and equity. The latter three concepts have served as foci of theoretical discussions among economists who analyse these issues and identify criteria that...

When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it...

When regulated firms are offered compensation to prevent them from relocating, efficiency requires that payments be distributed across firms so as to equalize marginal relocation probabilities, weighted by the damage caused by relocation. We formalize this fundamental economic logic and apply it...

A basic tenet of economics posits that when consumers or firms don't face the true social cost of their actions, market outcomes are inefficient. In the case of negative externalities, Pigouvian taxes are one way to correct this market failure, where the optimal tax leads agents to internalize...

We estimate the sensitivity of scrap decisions to changes in used car values - the "scrap elasticity" - and show how it influences used car fleets under policies aimed at reducing gasoline use. Large scrap elasticities will tend to produce emissions leakage under efficiency standards as the...

Germany committed itself to challenging greenhouse gas (GHG) emission reduction targets to 2020 and beyond. It has implemented a composite mix of policy measures to achieve its climate change mitigation goals, including a range of market-based instruments. These measures have helped reduce...

Poland is on track to meet its international greenhouse-gas emissions commitments. However, it will need to cut emissions significantly in the future, if the European Commission’s proposal on the Low Carbon Roadmap is adopted. Policies should ensure that the country’s substantial reduction...

New evidence for 21 OECD countries shows that the distributional effects of energy taxes differ by energy carrier. On an expenditure basis, taxes on transport fuels are not regressive on average, as households in lower expenditure deciles spend a lower proportion of their expenditure on taxes on...