Theory suggests that economic instruments, such as pollution taxes or tradable permits, can provide more efficient technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing dramatic decreases in allowed pollution-the U.S....

As tradeable permit programmes mature, two inter-related issues are becoming more critical in creating viable responses to a long-term, highly uncertain environmental problem such as climate change. First, we need to update policies in response to new information; and second, we need to design...

With the liberalisation of the European electricity market, new instruments are searched for in order to co-ordinate climate change initiatives with competition. This paper analyses the potential of a system of green electricity certificates to regulate the introduction of renewable energy...

This BEEP explains the mechanism of the EU Emissions Trading System (ETS) for the greenhouse gas carbon dioxide and explore into its likely sustainability impact on European industry. In doing so, it focuses on energy-intensive industries like cement, steel and aluminium production as well as on...

The effects of two environmental policy options for the reduction of pollution emissions, i.e. taxes and non-tradable quotas, are analyzed. In contrast to the prior literature this work endogenously takes into account the level of emissions before and after the adoption of the new environmental...

This paper argues that, in situations where choices are made between mutually exclusive investment projects and where there are economic rents, free allocation of tradable emission permits in emissions trading systems can weaken incentives for firms to invest in less carbon-intensive...

With the liberalisation of the European electricity market, new instruments are searched for in order to co-ordinate climate change initiatives with competition. This paper analyses the potential of a system of green electricity certificates to regulate the introduction of renewable energy...

In this paper we analyze the extent to which the increased role of allowance auctions after 2012 will influence the effectiveness, efficiency and equity of the Emissions Trading Scheme in the European Union (EU ETS). We argue that more auctioning affects neither the effectiveness nor the...

We investigate a central issue in the climate change debate associated with the Kyoto Protocol: the likely performance of international greenhouse gas trading mechanisms. Virtually all design studies and many projections of the costs of meeting the Kyoto targets have assumed that an...

This paper suggests that a mixture of measures may be needed to encourage renewable energy under the Kyoto Protocol. It explains that the goal of maximizing short term cost effectiveness tends to conflict with the goal of encouraging the long-term technological development that the world will...