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Linking Policies When Tastes Differ: Global Climate Policy in a Heterogeneous World

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  • Gilbert E. Metcalf
  • David Weisbach

Abstract

In this article we discuss the mechanics of linking different types of climate change policies and identify areas where linkage will be difficult. Our goal is to identify opportunities for constructive linkage and policy choices that may limit or hinder linkage. We argue that the basic approach underlying emission reduction credit systems like the Kyoto Clean Development Mechanism (CDM) and Joint Implementation can be extended to create linkage opportunities in diverse emission control systems in ways that do not necessarily suffer from the shortfalls of the current CDM. Moreover, although emission reduction credit systems are designed to work with market-based systems like cap and trade, we describe ways in which they can also interact with tax systems as well as certain regulatory systems. Copyright 2012, Oxford University Press.

Suggested Citation

  • Gilbert E. Metcalf & David Weisbach, 2012. "Linking Policies When Tastes Differ: Global Climate Policy in a Heterogeneous World," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 6(1), pages 110-129.
  • Handle: RePEc:oup:renvpo:v:6:y:2012:i:1:p:110-129
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    File URL: http://hdl.handle.net/10.1093/reep/rer021
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    References listed on IDEAS

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    Cited by:

    1. Bodansky, Daniel M. & Hoedl, Seth A. & Metcalf, Gilbert E. & Stavins, Robert N., 2014. "Facilitating Linkage of Heterogeneous Regional, National, and Sub-National Climate Policies through a Future International Agreement," Working Paper Series rwp14-056, Harvard University, John F. Kennedy School of Government.
    2. Itkonen, Juha, 2017. "Efficiency and dependency in a network of linked permit markets," Research Discussion Papers 20/2017, Bank of Finland.
    3. Matthew Ranson & Robert N. Stavins, 2016. "Linkage of greenhouse gas emissions trading systems: learning from experience," Climate Policy, Taylor & Francis Journals, vol. 16(3), pages 284-300, April.
    4. Sheila M. Olmstead & Robert N. Stavins, 2012. "Three Key Elements of a Post-2012 International Climate Policy Architecture," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 6(1), pages 65-85.
    5. Richard S.J. Tol, 2017. "Leaving an emissions trading scheme – insights from the United Kingdom," Working Paper Series 1017, Department of Economics, University of Sussex.
    6. repec:adr:anecst:y:2017:i:127:p:163-201 is not listed on IDEAS
    7. Burtraw, Dallas & Palmer, Karen & Munnings, Clayton & Weber, Paige & Woerman, Matt, 2013. "Linking by Degrees: Incremental Alignment of Cap-and-Trade Markets," Discussion Papers dp-13-04, Resources For the Future.
    8. Mehling, Michael A. & Metcalf, Gilbert E. & Stavins, Robert N., 2017. "Linking Heterogeneous Climate Policies (Consistent with the Paris Agreement)," MITP: Mitigation, Innovation and Transformation Pathways 266282, Fondazione Eni Enrico Mattei (FEEM).
    9. Bernard Caillaud & Gabrielle Demange, 2017. "Joint Design of Emission Tax and Trading Systems," Annals of Economics and Statistics, GENES, issue 127, pages 163-201.
    10. Baran Doda & Simon Quemin, 2018. "Linking Permit Markets Multilaterally," Working Papers 1804, Chaire Economie du climat.
    11. Simon Quemin & Christian de Perthuis, 2017. "Transitional restricted linkage between Emissions Trading Schemes," Working Papers 1701, Chaire Economie du climat.
    12. Aldy, Joseph Edgar, 2015. "Evaluating Mitigation Effort: Tools and Institutions for Assessing Nationally Determined Contributions," Scholarly Articles 23936083, Harvard Kennedy School of Government.
    13. repec:oup:renvpo:v:12:y:2018:i:1:p:183-189. is not listed on IDEAS
    14. Francesco Bosello & Ramiro Parrado, 2014. "Climate Change Impacts and Market Driven Adaptation: the Costs of Inaction Including Market Rigidities," Working Papers 2014.64, Fondazione Eni Enrico Mattei.

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