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

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  • 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.

Suggested Citation

  • Pablo del Río & Xavier Labandeira, 2008. "Barriers to the introduction of market-based instruments in climate policies: an integrated theoretical framework," Working Papers 0805, Universidade de Vigo, Departamento de Economía Aplicada.
  • Handle: RePEc:vig:wpaper:0805
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    References listed on IDEAS

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    Cited by:

    1. Lehmann, Paul & Gawel, Erik, 2013. "Why should support schemes for renewable electricity complement the EU emissions trading scheme?," Energy Policy, Elsevier, vol. 52(C), pages 597-607.
    2. del Río, Pablo, 2011. "Analysing future trends of renewable electricity in the EU in a low-carbon context," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(5), pages 2520-2533, June.
    3. 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.
    4. repec:eee:rensus:v:74:y:2017:i:c:p:824-834 is not listed on IDEAS
    5. Burtraw, Dallas & Woerman, Matt, 2013. "Economic Ideas for a Complex Climate Policy Regime," Discussion Papers dp-13-03-rev, Resources For the Future.

    More about this item

    Keywords

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

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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