The Economics of Mitigation Strategies

Marc Chesney, Jonathan Gheyssens and Luca Taschini
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Marc Chesney: University of Zurich
Jonathan Gheyssens: University of Zurich

Chapter 4 in Environmental Finance and Investments, 2013, pp 59-92 from Springer

Abstract: Abstract Chapter 3 presents the economic rationale behind climate change and introduce the crucial concept of externalities. Using simple and tractable models, this chapter explains the key dynamics behind environmental pollutions and the tragedy of the commons plaguing the climate, the most iconic public good. The chapter then proceeds to detail the three key economic instruments to remedy the issue of climate pollution, taxes, subsidies and permits, detailing their respective advantages and limits. A special emphasis is put on the existence and influence of uncertainty, a central concept that prepares the key concepts of real options and environmental investments presented in Chap. 4. Finally, the chapter touches upon the complex relationship between economic growth and the environment and describes possible alternatives to mitigate climate while conserving economic momentum.

Keywords: Marginal Cost; Abatement Cost; Intermediate Good; Carbon Price; Social Optimum (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-642-36623-9_4

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DOI: 10.1007/978-3-642-36623-9_4

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