We study the optimal combination of short and long-lived options for reducing greenhouse gas (GHG) emissions. Electrification of the car fleet is used as an example. A transition from internal combustion engines vehicles (ICEVs) to electric vehicles (EVs) can be incentivized by both subsidies on...

Tax aversion makes it politically challenging to introduce Pigouvian taxes. One proposed solution to overcome this resistance is to package policies. Using an online lab experiment, we investigate whether combining a tax and a subsidy is perceived as more acceptable than the tax or the subsidy...

Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage, which hampers countries' welfare. In order to limit leakage, governments consider supporting domestic trade exposed firms by subsidizing their investments in...