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Barriers to the introduction of market-based instruments in climate policies: an integrated theoretical framework

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Author Info

  • Pablo del Río
  • Xavier Labandeira

Abstract

Although economists have usually defended the superiority of market-based instruments, and an increasing use of those measures in OECD countries has taken place, there has been (and still is) some reluctance by policy makers to use them for climate policy. The aim of this paper is to provide a theoretical framework which allows the explanation of this paradox. This framework combines standard environmental economics reasoning with two economic approaches: the institutional path dependence and the public choice perspectives, complemented with some insights from political science studies. Ex-post empirical research using the Spanish case illustrates the accuracy and policy-relevance of our approach. Analysing the barriers to market-based measures in climate policy may allow us to draw lessons to facilitate the implementation of these instruments in the future.

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Bibliographic Info

Paper provided by Universidade de Vigo, Departamento de Economía Aplicada in its series Working Papers with number 0805.

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Length: 36 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:vig:wpaper:0805

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Related research

Keywords: Climate policy; Public Choice; Institutional Path Dependency; Spain;

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References

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  1. Pearce, David, 2006. "The political economy of an energy tax: The United Kingdom's Climate Change Levy," Energy Economics, Elsevier, vol. 28(2), pages 149-158, March.
  2. Bruvoll, Annegrete & Larsen, Bodil Merethe, 2004. "Greenhouse gas emissions in Norway: do carbon taxes work?," Energy Policy, Elsevier, vol. 32(4), pages 493-505, March.
  3. Schneider, Friedrich & Volkert, Juergen, 1999. "No chance for incentive-oriented environmental policies in representative democracies? A Public Choice analysis," Ecological Economics, Elsevier, vol. 31(1), pages 123-138, October.
  4. Svendsen, Gert Tinggaard & Daugbjerg, Carsten & Hjollund, Lene & Pedersen, Anders Branth, 2001. "Consumers, industrialists and the political economy of green taxation: CO2 taxation in OECD," Energy Policy, Elsevier, vol. 29(6), pages 489-497, May.
  5. Unruh, Gregory C., 2002. "Escaping carbon lock-in," Energy Policy, Elsevier, vol. 30(4), pages 317-325, March.
  6. Portney, Paul & Oates, Wallace, 2001. "The Political Economy of Environmental Policy," Discussion Papers dp-01-55, Resources For the Future.
  7. Paul Ekins & Stefan Speck, 1999. "Competitiveness and Exemptions From Environmental Taxes in Europe," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(4), pages 369-396, June.
  8. Baranzini, Andrea & Goldemberg, Jose & Speck, Stefan, 2000. "A future for carbon taxes," Ecological Economics, Elsevier, vol. 32(3), pages 395-412, March.
  9. Xavier Labandeira & José M. Labeaga, 1999. "Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households," Fiscal Studies, Institute for Fiscal Studies, vol. 20(3), pages 305-320, September.
  10. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 371-400, August.
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Cited by:
  1. Iglesias, Guillermo & del Río, Pablo & Dopico, Jesús Ángel, 2011. "Policy analysis of authorisation procedures for wind energy deployment in Spain," Energy Policy, Elsevier, vol. 39(7), pages 4067-4076, July.
  2. Burtraw, Dallas & Woerman, Matt, 2013. "Economic Ideas for a Complex Climate Policy Regime," Discussion Papers dp-13-03-rev, Resources For the Future.

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