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How should we measure environmental policy stringency? A new approach

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  • Caspar Sauter

Abstract

One of the biggest obstacles in cross-country empirical research in the area of environmental economics is the absence of a sound indicator quantifying environmental policy stringency. A variety of indicators have been proposed and are currently used. Almost none of them rely on an explicitly stated methodology, violating thereby one of the most fundamental rules of index construction. To overcome this problem, this paper develops a new general methodology for the measurement of environmental policy stringency and proposes a first implementation using the example of CO2 policy stringency. To do so it combines originally extensive databases on CO2 emissions.

Suggested Citation

  • Caspar Sauter, 2014. "How should we measure environmental policy stringency? A new approach," IRENE Working Papers 14-01, IRENE Institute of Economic Research.
    • Handle: RePEc:irn:wpaper:14-01
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Mohamed Boly, 2021. "On the allocation of environmental aid : strategy beyond environmental considerations?," Working Papers hal-03174770, HAL.
    2. Dezhong Duan & Hong Jin, 2022. "Environmental Regulation and Green Technology Diffusion: A Case Study of Yangtze River Delta, China," Land, MDPI, vol. 11(11), pages 1-14, October.
    3. Dezhong Duan & Qifan Xia, 2021. "Does Environmental Regulation Promote Environmental Innovation? An Empirical Study of Cities in China," IJERPH, MDPI, vol. 19(1), pages 1-18, December.
    4. Justyna Godawska & Joanna Wyrobek, 2021. "The Impact of Environmental Policy Stringency on Renewable Energy Production in the Visegrad Group Countries," Energies, MDPI, vol. 14(19), pages 1-23, September.
    5. Marcel Probst & Caspar Sauter, 2015. "CO2 Emissions and Greenhouse Gas Policy Stringency - An Empirical Assessment," IRENE Working Papers 15-03, IRENE Institute of Economic Research.
    6. Julia Bahlmann & Paul J.J. Welfens, 2021. "Environmental Policy Stringency and Foreign Direct Investment: New Insights from a Gravity Model Approach," EIIW Discussion paper disbei294, Universitätsbibliothek Wuppertal, University Library.
    7. Wilhelm Althammer & Erik Hille, 2016. "Measuring climate policy stringency: a shadow price approach," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(4), pages 607-639, August.
    8. Sylvain Weber & Reyer Gerlagh & Nicole A. Mathys & Daniel Moran, 2017. "CO2 embedded in trade: trends and fossil fuel drivers," Development Working Papers 413, Centro Studi Luca d'Agliano, University of Milano.
    9. Wenjuan Tu & Rui Shi, 2022. "Influence of Environmental Regulation on the International Competitiveness of the High-Tech Industry: Evidence from China," Sustainability, MDPI, vol. 15(1), pages 1-15, December.
    10. Misato Sato & Gregor Singer & Damien Dussaux & Stefania Lovo, 2015. "International and sectoral variation in energy prices 1995-2011: how does it relate to emissions policy stringency?," GRI Working Papers 187, Grantham Research Institute on Climate Change and the Environment.
    11. Millimet, Daniel L., 2015. "Covariate measurement and endogeneity," Economics Letters, Elsevier, vol. 136(C), pages 59-63.
    12. Egüez, Alejandro, 2020. "Compliance with the EU Waste Hierarchy: A matter of stringency, enforcement, and time," Umeå Economic Studies 981, Umeå University, Department of Economics.
    13. Bel, Germà & Joseph, Stephan, 2018. "Policy stringency under the European Union Emission trading system and its impact on technological change in the energy sector," Energy Policy, Elsevier, vol. 117(C), pages 434-444.

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    More about this item

    Keywords

    Greenhouse gas emissions; environmental regulation; environmental policy stringency; policy stringency index; CO2 emissions;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General

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