The paper discusses questions resulting from a study of the interaction of exogenous shocks and environmental policy. In a model with pollution as a side effect of consumption environmental policy is introduced in the form of a consumption tax with or without a subsidy on eco-friendly...

The paper discusses questions resulting from a study of the interaction of a change of preferences and environmental policy. In a model with pollution as a side effect of consumption environmental policy is introduced in the form of a consumption tax with or without a subsidy on eco-friendly...

To facilitate the energy transition, regulators can choose between several policy options to stimulate energy-efficient design by firms. One possibility is to target firms directly through standards or subsidies. Alternatively, it is possible to influence firms indirectly by targeting firms'...

To facilitate the energy transition, regulators can choose between several policy options to stimulate energy-efficient design by firms. One possibility is to target firms directly through standards or subsidies. Alternatively, it is possible to influence firms indirectly by targeting firms'...

Greenhouse gas policies confront the trade-off between the costs of reducing emissions and the benefits of avoided climate change. The risk of uncertain and potentially irreversible catastrophes is an important issue related to the latter, and one that has not yet been well incorporated into...

With the increase of the linear reduction factor (LRF), the implementation of the market stability reserve (MSR) and the introduction of the cancellation mechanism (CM), the EU ETS changed fundamentally. We develop a discrete time model of the intertemporal allowance market that accurately...

The EU implemented the Market Stability Reserve (MSR) in response to the 2008 financial crisis to deal with short-term impacts of future shocks, such as the COVID-19 pandemic. We link a model that intertemporally optimizes the handling of banked allowances every five years with one that...

The latest reform of European Union Emission Trading System (EU ETS) enables overlapping policies, such as national coal phase-outs, to affect total emissions. For evaluatingoverlapping policies, this paper applies a detailed partial equilibrium model of the EU ETS.Under perfect foresight,...

Economists tend to view a uniform emissions price as the most cost-effective approach to reducing greenhouse gas emissions. This paper offers a different view, focusing on economies where society values the well-being of future generations more than private actors. Employing analytical and...

Recently, several articles rely on marginal abatement cost (MAC) curves to analyze the EU ETS. While the assumptions on MAC curves drive the results, the prevailing literature on the EU ETS does not take the shape of MAC curves into account. This paper discusses the implications of MAC curve...