Hybrid carbon incentive mechanisms and political acceptability
AbstractThis paper analyses how hybrid systems of carbon taxes and tradeable permits optimize some conflicting dimensions of political acceptability related to the design of these instruments. Pure systems like taxes without exemptions or auctioned tradeable permits cause problems for political acceptability in open economies due to high overall costs (abatement cost plus payments on the tax or auctions) for current polluters. Unfortunately, pure systems based on grandfathering of emission rights across the board do not provide a feasible alternative because of monitoring and enforcement problems. In contrast, consciously designed hybrid systems employ grandfathering of emission rights together with either carbon taxes or auctioned carbon permits in order to overcome acceptability problems of pure systems, while leaving incentives to reduce emissions at the margin untouched. Moreover, monitoring and enforcement costs of the hybrid systems are less due to the lower number of participating agents compared with the pure systems, while opportunities for costor burden-sharing exist as well. Copyright Kluwer Academic Publishers 1997
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.
Volume (Year): 9 (1997)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100263
carbon pollution credits; carbon taxes; environmental policy; externalities; hybrid instruments; tradeable carbon permits;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Graciela Chichilnisky & Geoffrey Heal, 1995. "Markets for Tradeable CO2 Emission Quotas Principles and Practice," OECD Economics Department Working Papers 153, OECD Publishing.
- Michael Hoel, 1993. "Harmonization of carbon taxes in international climate agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 3(3), pages 221-231, June.
- Hoel, Michael, 1991. "Global environmental problems: The effects of unilateral actions taken by one country," Journal of Environmental Economics and Management, Elsevier, vol. 20(1), pages 55-70, January.
- Thomas A. Barthold, 1994. "Issues in the Design of Environmental Excise Taxes," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 133-151, Winter.
- Bovenberg, A.L., 1993. "Policy instruments for curbing CO2 emissions: The case of the Netherlands," Open Access publications from Tilburg University urn:nbn:nl:ui:12-152981, Tilburg University.
- Stephen Smith, 1992. "Taxation and the environment: a survey," Fiscal Studies, Institute for Fiscal Studies, vol. 13(4), pages 21-57, January.
- John Pezzey, 1992. "The Symmetry between Controlling Pollution by Price and Controlling It by Quantity," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 983-91, November.
- Zodrow, George R., 1992. "Grandfather rules and the theory of optimal tax reform," Journal of Public Economics, Elsevier, vol. 49(2), pages 163-190, November.
- Heindl, Peter, 2012. "Mitigating market power under tradeable permits," ZEW Discussion Papers 12-065, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Lambie, N. Ross, 2009. "The role of real options analysis in the design of a greenhouse gas emissions trading scheme," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47626, Australian Agricultural and Resource Economics Society.
- Sjak Smulders & Herman R. J. Vollebergh, 2001.
"Green Taxes and Administrative Costs: The Case of Carbon Taxation,"
in: Behavioral and Distributional Effects of Environmental Policy, pages 91-130
National Bureau of Economic Research, Inc.
- Sjak Smulders & Herman R.J. Vollebergh, 1999. "Green Taxes and Administrative Costs: The Case of Carbon Taxation," NBER Working Papers 7298, National Bureau of Economic Research, Inc.
- Vollebergh, Herman R.J., 2008. "Lessons from the polder: Energy tax design in The Netherlands from a climate change perspective," Ecological Economics, Elsevier, vol. 64(3), pages 660-672, January.
- Cameron Hepburn, 2006. "Regulation by Prices, Quantities, or Both: A Review of Instrument Choice," Oxford Review of Economic Policy, Oxford University Press, vol. 22(2), pages 226-247, Summer.
- Cameron Hepburn & John Quah & Robert Ritz, 2006. "Emissions Trading and Profit-Neutral Grandfathering," Economics Series Working Papers 295, University of Oxford, Department of Economics.
- John Pezzey & Andrew Park, 1998. "Reflections on the Double Dividend Debate," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 539-555, April.
- Herman Vollebergh, 2004. "Lessons from the Polder: Is Dutch CO2-Taxation Optimal?," Working Papers 2004.6, Fondazione Eni Enrico Mattei.
- Bjertnæs, Geir H., 2011. "Avoiding adverse employment effects from electricity taxation in Norway: What does it cost?," Energy Policy, Elsevier, vol. 39(9), pages 4766-4773, September.
- A. Lans Bovenberg & Lawrence H. Goulder, 2001.
"Neutralizing the Adverse Industry Impacts of CO2 Abatement Policies: What Does It Cost?,"
in: Behavioral and Distributional Effects of Environmental Policy, pages 45-90
National Bureau of Economic Research, Inc.
- A. Lans Bovenberg & Lawrence H. Goulder, 2000. "Neutralizing the Adverse Industry Impacts of CO2 Abatement Policies: What Does it Cost?," NBER Working Papers 7654, National Bureau of Economic Research, Inc.
- Goulder, Lawrence & Bovenberg, A. Lans, 2000. "Neutralizing the Adverse Industry Impacts of CO2 Abatement Policies: What Does It Cost?," Discussion Papers dp-00-27, Resources For the Future.
- J. Andrew Kelly & Herman R.J. Vollebergh, 2012. "Adaptive Policy Mechanisms for Transboundary Air Pollution Regulation: Reasons and Recommendations," Working Papers 2012.32, Fondazione Eni Enrico Mattei.
- Geir H. Bjertnæs, 2005. "Avoiding Adverse Employment Effects from Energy Taxation: What does it cost?," Discussion Papers 432, Research Department of Statistics Norway.
- Pezzey, John C.V., 2001. "Distributing the Value of a Country’s Tradeable Carbon Permits," 2001 Conference (45th), January 23-25, 2001, Adelaide 125832, Australian Agricultural and Resource Economics Society.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.