Research efforts towards new energy sources and towards the efficiency of energy use will be vital to reducing CO2 abatement costs in the long term. Can such efforts be induced by price instruments? Economists often cite induced technological change as a possible consequence of environmental...

This article explores the macroeconomic impact of the rise in energy prices since 2004. The article discusses the various channels through which rising energy prices are likely to influence the degree of inflationary pressure in the UK economy. Rising energy costs put upward pressure on the...