Upstream versus Downstream Implementation of Climate Policy
AbstractThis chapter examines the tradeoffs of regulating upstream (e.g., coal, natural gas, and refined petroleum product producers) versus regulating downstream (e.g., direct sources of greenhouse gases (GHG)). In general, regulating at the source provides polluters with incentives to choose among more opportunities to abate pollution. This chapter develops a simple theoretical model that shows why this added flexibility achieves the lowest overall costs. I broaden the theory to incorporate several reasons why these potential gains from trade may not be realized--transactions costs, leakage, and offsets--in the context of selecting the vertical segment of regulation.
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 InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16116.
Date of creation: Jun 2010
Date of revision:
Publication status: published as Erin T. Mansur. "Upstream versus Downstream Implementation of Climate Policy," in Don Fullerton and Catherine Wolfram, editors, "The Design and Implementation of U.S. Climate Policy" University of Chicago Press (2012)
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- Erin T. Mansur, 2011. "Upstream versus Downstream Implementation of Climate Policy," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 179-193 National Bureau of Economic Research, Inc.
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-26 (All new papers)
- NEP-ENE-2010-06-26 (Energy Economics)
- NEP-ENV-2010-06-26 (Environmental Economics)
- NEP-REG-2010-06-26 (Regulation)
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.:
- Chiu, Stephen & Mansley, Edward C. & Morgan, John, 1998. "Choosing the right battlefield for the war on drugs: an irrelevance result," Economics Letters, Elsevier, vol. 59(1), pages 107-111, April.
- Bushnell, James & Peterman, Carla & Wolfram, Catherine, 2008.
"Local Solutions to Global Problems: Climate Change Policies and Regulatory Jurisdiction,"
Staff General Research Papers
13125, Iowa State University, Department of Economics.
- James Bushnell & Carla Peterman & Catherine Wolfram, 2008. "Local Solutions to Global Problems: Climate Change Policies and Regulatory Jurisdiction," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 2(2), pages 175-193, Summer.
- Carlton, Dennis W & Loury, Glenn C, 1980. "The Limitations of Pigouvian Taxes as a Long-Run Remedy for Externalities," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 559-66, November.
- Ann Wolverton & Don Fullerton, 2000.
"Two Generalizations of a Deposit-Refund Systems,"
American Economic Review,
American Economic Association, vol. 90(2), pages 238-242, May.
- Gilbert Metcalf & David Weisbach, 2008.
"The Design of a Carbon Tax,"
Discussion Papers Series, Department of Economics, Tufts University
0727, Department of Economics, Tufts University.
- Gilbert Metcalf & David Weisbach, 2008. "The Design of a Carbon Tax," Discussion Papers Series, Department of Economics, Tufts University 0728, Department of Economics, Tufts University.
- Metcalf, Gilbert & Weisbach, David, 2009. "The Design of a Carbon Tax," Working paper 142, Regulation2point0.
- Raj Chetty & Adam Looney & Kory Kroft, 2009.
"Salience and taxation: theory and evidence,"
Finance and Economics Discussion Series
2009-11, Board of Governors of the Federal Reserve System (U.S.).
- Hobbs, Benjamin F. & Bushnell, James & Wolak, Frank A., 2010.
"Upstream vs. downstream CO2 trading: A comparison for the electricity context,"
Elsevier, vol. 38(7), pages 3632-3643, July.
- Hobbs, Benjamin & Bushnell, James & Wolak, Frank, 2010. "Upstream vs. Downstream CO2 Trading: A Comparison for the Electricity Context," Staff General Research Papers 31184, Iowa State University, Department of Economics.
- Hobbs, B.F. & Bushnell, J. & Wolak, F.A., 2010. "Upstream vs. Downstream CO2 Trading: A Comparison for the Electricity Context," Cambridge Working Papers in Economics 1018, Faculty of Economics, University of Cambridge.
- Bushnell, James & Chen, Yihsu, 2009.
"Regulation, Allocation and Leakage in Cap-And-Trade Markets for CO2,"
Staff General Research Papers
13131, Iowa State University, Department of Economics.
- James B. Bushnell & Yihsu Chen, 2009. "Regulation, Allocation, and Leakage in Cap-and-Trade Markets for CO2," NBER Working Papers 15495, National Bureau of Economic Research, Inc.
- Fischer, Carolyn & Fox, Alan K., 2009. "Comparing Policies to Combat Emissions Leakage: Border Tax Adjustments versus Rebates," Discussion Papers dp-09-02, Resources For the Future.
- Juan-Pablo Montero, 1999. "Voluntary Compliance with Market-Based Environmental Policy: Evidence from the U.S. Acid Rain Program," Journal of Political Economy, University of Chicago Press, vol. 107(5), pages 998-1033, October.
- Buscemi, Antonino & Yallwe, Alem Hagos, 2011.
"It is time to re-think on environment, energy and economics (E3),"
30998, University Library of Munich, Germany.
- Yallwe, Hagos Alem & Buscemi, Antonino, 2011. "It is time to re-think on environment, energy and economics (E3)," MPRA Paper 32216, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.