We analyze how a country pursuing a unilateral climate policy may contribute to a reduction in global CO2 emissions in a cost-effective way. To do so its system of energy taxes and subsidies must account for leakage of emissions from the domestic to the foreign economy. We focus on leakage...

We analyze how a country pursuing a unilateral climate policy may contribute to a reduction in global CO2 emissions in a cost-effective way. To do so its system of energy taxes and subsidies must account for leakage of emissions from the domestic to the foreign economy. We focus on leakage...

The European Union's Emissions Trading System is the largest system in the world for trade in greenhouse gases. It used to be a cap-and-trade scheme with a fixed supply of permits. However, a recent reform of the system "punctures the waterbed" by making the supply of permits endogenous. The...

There are conflicting views on how to handle permits for greenhouse gases in cost-benefit analysis. This paper aims at clarifying within a simple general equilibrium model how to treat different kinds of trade-able permits in economic evaluations of projects. Within a framework that reminds of...

Putting a price on carbon is considered a crucial step for China's endeavor of harnessing the market forces to reduce its energy consumption and carbon emissions. Indeed, aligned with China's grand experiment with low-carbon provinces and low-carbon cities in six provinces and thirty-six cities,...

I estimate the level of emissions cost pass-through to hourly wholesale electricity prices in Germany, based on spot market data. I control for contemporaneous shocks to demand and supply by constructing a detailed supply curve for fossil generation, and intersecting it with residual demand for...

In a parsimonious two-sector general equilibrium model, we challenge the widely-held tenet that within a cap-and-trade system renewable energy policies have no effect on carbon emissions. If the cap does not capture all sectors, we demonstrate that variations of a renewable energy subsidy change...

In this chapter we review research that rejects the widely held tenet that renewable energy promotion policies have no effect on carbon emissions if the electricity sector is subject to a cap-and-trade scheme. Specifically, it shows that such policies generally do have a net impact on carbon...

This paper estimates the potential of fuel tax reforms to curb harmful air pollutants and carbon emissions from road transport in Europe. We provide robust estimates for the responsiveness of fuel consumption to changes in prices, which constitute a key determinant for emissions pathways in...