Are Absolute Emissions Better for Modeling? It's All Relative
Some environmental policies focus on emissions intensity rather than total emissions, or they try to mitigate the regulatory impact on the final product market. To analyze the effects of these policies, or to evaluate the distributional effects of any regulation on consumers and producers, output must be incorporated explicitly into an economic model of abatement, separately from the emissions variable. This provides two options. Traditionally, total emissions and output are the independently controlled variables, leaving emissions intensity as endogenously determined. Alternatively, one can make emissions intensity and output the control variables, leaving total emissions as the endogenously determined variable. One is the dual of the other and the problems are equivalent, but the latter method offers more transparency for examining intensity-based policies. This note shows how the intensity-based model fits into the traditional context.
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.:
- Dissou, Yazid, 2005. "Cost-effectiveness of the performance standard system to reduce CO2 emissions in Canada: a general equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 27(3), pages 187-207, October.
- Gersbach, Hans & Requate, Till, 2004. "Emission taxes and optimal refunding schemes," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 713-725, March.
- Christoph Böhringer & Andreas Lange, 2005. "Economic Implications of Alternative Allocation Schemes for Emission Allowances," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(3), pages 563-581, 09.
- Bernard, Alain L. & Fischer, Carolyn & Fox, Alan K., 2007. "Is there a rationale for output-based rebating of environmental levies?," Resource and Energy Economics, Elsevier, vol. 29(2), pages 83-101, May.
- Carolyn Fischer, 2003.
"Combining rate-based and cap-and-trade emissions policies,"
Taylor & Francis Journals, vol. 3(sup2), pages 89-103, December.
- Fischer, Carolyn, 2003. "Combining Rate-Based and Cap-and-Trade Emissions Policies," Discussion Papers dp-03-32, Resources For the Future.
- Sterner, Thomas & Hoglund Isaksson, Lena, 2006. "Refunded emission payments theory, distribution of costs, and Swedish experience of NOx abatement," Ecological Economics, Elsevier, vol. 57(1), pages 93-106, April.
- Fischer, Carolyn & Bernard, Alain & Vielle, Marc, 2001. "Is There a Rationale for Rebating Environmental Levies?," Discussion Papers dp-01-31-, Resources For the Future.
- Katrin Millock & Céline Nauges, 2006.
"Ex Post Evaluation of an Earmarked Tax on Air Pollution,"
University of Wisconsin Press, vol. 82(1), pages 68-84.
- Katrin Millock & Céline Nauges, 2006. "Ex Post Evaluation of an Earmarked Tax on Air Pollution," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00109559, HAL.
When requesting a correction, please mention this item's handle: RePEc:rff:dpaper:dp-04-14. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Webmaster)
If references are entirely missing, you can add them using this form.