Climate policies with pollution externalities and learning spillovers
AbstractEconomic theory suggests that with a pollution externality and learning spillovers related to renewable energy technologies, the optimal climate policy mix includes an emissions policy and an output subsidy to the learning industry. Instead of output subsidies, feed-in tariffs are often implemented in addition to emissions policies. This paper reveals that this policy mix may theoretically provide for a first-best outcome as well. However, its efficient design may be cumbersome for regulators. An emissions tax must be below the Pigovian level and differentiate between fossil fuels. Moreover, both tax and feed-in tariff must be adapted continuously. --
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Bibliographic InfoPaper provided by Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS) in its series UFZ Discussion Papers with number 10/2009.
Date of creation: 2009
Date of revision:
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Emissions tax; feed-in tariffs; policy mix; spillovers; learning by doing;
Other versions of this item:
- Lehmann, Paul, 2009. "Climate Policies with Pollution Externalities and Learning Spillovers," MPRA Paper 21353, University Library of Munich, Germany.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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