Supply-Side Crediting to Manage Climate Policy Spillover Effects

Michael A Mehling

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Two types of spillover effects influence progress towards decarbonization: greenhouse gas emissions leakage as well as low-carbon technology innovation and diffusion. Emissions leakage caused by uneven imposition of carbon constraints limits their climate benefits, undermines political support, and gives rise to equity concerns. Solutions to address emissions leakage, meanwhile, are incompatible with global decarbonization or face serious implementation challenges. Diffusion of low -carbon technology averts emissions leakage, but depends on scaled up investment in research, development and deployment to drive down technology cost. Supply-side crediting can address both spillover effects, reducing emissions leakage by increasing global fossil fuel prices, and generating revenue for investment in lowcarbon technologies to accelerate their diffusion and further limit emissions leakage.

Keywords: Climate change; spillover effects; emissions leakage; supply-side approaches; technology; offset credits (search for similar items in EconPapers)
JEL-codes: H23 K33 O30 Q54 (search for similar items in EconPapers)
Date: 2023-12-29
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econ.cam.ac.uk/sites/default/files/pub ... pe-pdfs/cwpe2345.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:2345

Access Statistics for this paper

More papers in Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
Bibliographic data for series maintained by Jake Dyer ().