This paper finds that it is optimal to start a long-term emission-reduction strategy with significant short-term abatement investment, even if the optimal carbon price starts low and grows progressively over time. Moreover, optimal marginal abatement investment costs differ across sectors of the...

Decision makers facing abatement targets need to decide which abatement measures to implement, and in which order. Measure-explicit marginal abatement cost curves depict the cost and abating potential of available mitigation options. Using a simple intertemporal optimization model, we...

Understanding the distributional impacts of market-based climate policies is crucial to design economically efficient climate change mitigation policies that are socially acceptable and avoid adverse impacts on the poor. Empirical studies that examine the distributional impacts of carbon pricing...

Environmental regulations raise production costs at regulated firms, though in most cases the costs are only a small fraction of a firm's total costs. Productivity tends to fall, and firms may shift new investment and production to locations with less stringent regulation. However, environmental...

As a relevant indicator for quantifying the value of carbon emissions, the marginal abatement cost (MAC) of carbon emissions has received increasing attention from academics and policymakers. This study uses a quadratic directional output distance function to analyse the technical efficiency,...

Assessment of climate change policies requires aggregation of costs and benefits over time and across generations, a process ordinarily done through discounting. Choosing the correct discount rate has proved controversial and highly consequential. To clarify past analysis and guide future work,...

This paper evaluates the consequences of renewable energy policies on welfare, resource rents and energy costs in a world where carbon pricing is imperfect and the regulator seeks to limit emissions to a (cumulative) target. We use a global general equilibrium model with an intertemporal fossil...

There is an increasing demand for putting a shadow price on the environment to guide public policy and incentivize private behaviour. In practice, setting that price can be extremely difficult as uncertainties abound. There is often uncertainty not just about individual parameters but about the...

This paper tests the independence property under the Coase Theorem in a large multinational cap-and-trade scheme for greenhouse gas emissions, the EU Emissions Trading System (EU ETS). I analyze whether emissions of power producers regulated under the EU ETS are independent from allowance...