This paper examines the optimal instrument choice to control emissions under uncertainty. A hybrid regulation mechanism is developed that contains cap-and-trade, emissions taxes and socalled safety valves as special cases. This makes it possible to examine optimal policy choice and the resulting...

This paper takes its departure in two observations from the EU’s climate policy. First, the EU has adopted a dual approach with a trading scheme covering CO2 emissions from the energy intensive industry, while the remaining emitters are subject to emission taxes. Second, the targets are...

Because of large economic and environmental asymmetries among world regions and the incentive to free ride, an international climate Regime with broad participation is hard to reach. Most of the so far proposed Regimes base on an allocation of emission rights that is to be perceived as fair....

"The so-called Environmental Sector produces technologies, products and services that prevent or reduce environmental damages. On the background of growing environmental problems such as climate protection this sector seems to be more and more important. Contrary to that, a theoretical model...

This work contributes to the debate on coordination of international environmental policy by revisiting Mandell (2008)’s result who, on the ground of Weitzman (1974)’s model, is in favor of a decentralized regulation at the sectorial or country level instead of a unified one. We show that...

We study an environmental policy that (i) tax some emitters while others are covered by a cap-and-trade system and (ii) index the tax level to the permit price. Such a policy could be attractive in a world where abatement costs are uncertain and the regulator has information about the...

This guide to developing domestic carbon crediting mechanisms is intended to assist national and subnational policymakers considering whether and how to establish a carbon crediting mechanism in their jurisdiction. The guide provides insights into the decision points for designing a crediting...

Eine strengere Klimapolitik in einem Teil der Welt kann zu Verschiebungen der komparativen Vorteile führen und damit zur Verlagerung der Herstellung besonders CO2-intensiver Güter in Länder mit laxer Klimapolitik. Die Analyse einer Datenbank mit den Footprints von 40 Ländern zeigt, dass die...

A model of pollution control subject to two types of uncertainty is presented. First, the natural decay of the pollution stock follows stochastic dynamics that drives a diffusion pollution process (“stochastic uncertainty”). Moreover, the damage coefficient which determines the amount of...

The social cost of carbon (SCC), commonly referred to as the carbon price, is the monetized damage from emitting one unit of CO2 to the atmosphere. The SCC is typically obtained from large-scale computational Integrated Assessment Models (IAMs) that consolidate interdisciplinary climate research...