Major carbon-pricing systems in Europe and North America involve multiple jurisdictions (countries or states). Individual jurisdictions often pursue additional initiatives—such as unilateral carbon price floors, legislation to phase out coal, aviation taxes or support programs for renewable...

The success of climate policies depends crucially on the dynamics of public support. Using unique longitudinal data from three surveys conducted between 2019 and 2022, we study the variations of public support for carbon pricing in Germany. The period includes two relevant events: the...

In the intensifying public debate about limiting the harmful effects of climate change, many global corporations have recently articulated so-called “net-zero” goals for reducing and ultimately eliminating their own greenhouse gas emissions. We first examine the details ofthe carbon...

We show the importance of emission disclosure for climate policies in a DSGE model for the euro area. A low-carbon energy and a fossil energy sector contribute to production and are financed by balance-sheet constrained intermediaries. The underestimation of emissions from fossil energy firms...

It is widely believed that an environmental tax (price regulation) and cap-and-trade (quantity regulation) are equally efficient in controlling pollution when there is no uncertainty. We show that this is not the case if some consumers (firms, local governments) are morally concerned about...

Climate protection should use environmental policy instruments that raise revenues, which can be used, for instance, to cut labour taxes to alleviate unemployment in economies suffering from high and persistent unemployment. This paper elaborates the possibilities of an employment dividend of...

The green paradox conveys the idea that climate policies may have unintended side effects when taking into account the reaction of fossil fuel suppliers. In particular, carbon taxes that will be implemented in the future induce resource owners to extract more rapidly which increases present...

We develop a two sector incomplete markets integrated assessment model to analyze the effectiveness of green quantitative easing (QE) in complementing fiscal policies for climate change mitigation. We model green QE through an outstanding stock of private assets held by a monetary authority and...

"This essay revisits the question of instrument choice for the regulation of externalities in the context of climate change. The central point is that the Pigouvian prescription to equate marginal control costs with the expected marginal benefits of damage reduction should guide the design of...