IDEAS home Printed from https://ideas.repec.org/p/fem/femwpa/2011.73.html
   My bibliography  Save this paper

Using the Market to Address Climate Change: Insights from Theory and Experience

Author

Listed:
  • Joseph E. Aldy

    (Assistant Professor of Public Policy, Harvard Kennedy School, Nonresident Fellow, Resources for the Future, and Faculty Research Fellow, National Bureau of Economic Research)

  • Robert N. Stavins

    (Albert Pratt Professor of Business and Government, Harvard Kennedy School, University Fellow, Resources for the Future, and Research Associate, National Bureau of Economic Research)

Abstract

Emissions of greenhouse gases linked with global climate change are affected by diverse aspects of economic activity, including individual consumption, business investment, and government spending. An effective climate policy will have to modify the decision calculus for these activities in the direction of more efficient generation and use of energy, lower carbon-intensity of energy, and – more broadly – a more carbon-lean economy. The only approach to doing this on a meaningful scale that would be technically feasible and cost-effective is carbon pricing, that is, market-based climate policies that place a shadow-price on carbon dioxide emissions. We examine alternative designs of three such instruments – carbon taxes, cap-and-trade, and clean energy standards. We note that the U.S. political response to possible market-based approaches to climate policy has been and will continue to be largely a function of issues and structural factors that transcend the scope of environmental and climate policy.

Suggested Citation

  • Joseph E. Aldy & Robert N. Stavins, 2011. "Using the Market to Address Climate Change: Insights from Theory and Experience," Working Papers 2011.73, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2011.73
    as

    Download full text from publisher

    File URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2011-073.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The best solution: carbon taxes
      by Economic Logician in Economic Logic on 2011-12-06 21:29:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michel Damian, 2012. "Repenser l'économie du changement climatique," Post-Print halshs-00709929, HAL.
    2. Schmidt, Tobias S. & Battke, Benedikt & Grosspietsch, David & Hoffmann, Volker H., 2016. "Do deployment policies pick technologies by (not) picking applications?—A simulation of investment decisions in technologies with multiple applications," Research Policy, Elsevier, vol. 45(10), pages 1965-1983.
    3. Zheng, Shiyuan & Fu, Xiaowen & Wang, Kun & Li, Hongchang, 2021. "Seaport adaptation to climate change disasters: Subsidy policy vs. adaptation sharing under minimum requirement," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 155(C).

    More about this item

    Keywords

    Global Climate Change; Market-Based Instruments; Carbon Pricing; Carbon Taxes; Cap-And-Trade; Clean Energy Standards;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2011.73. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alberto Prina Cerai (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.