Efficiency Gains from "What"-Flexibility in Climate Policy An Integrated CGE Assessment

Christoph Bohringer, Andreas Loschel and Thomas F. Rutherford
Authors registered in the RePEc Author Service: Andreas Löschel and Thomas F. Rutherford ()

The Energy Journal, 2006, vol. Multi-Greenhouse Gas Mitigation and Climate Policy, issue Special Issue #3, 405-424

Abstract: We investigate the importance of ÒwhatÓ-flexibility on top of ÒwhereÓ- and ÒwhenÓ-flexibility for alternative emission control schemes that prescribe long-term temperature targets and eventually impose additional constraints on the rate of temperature change. We find that ÒwhatÓ-flexibility substantially reduces the economic adjustment costs. When comparing policies that simply involve long-term temperature targets against more stringent strategies with constraints on the rate of temperature increase, it turns out that the latter involve much higher costs. The cost difference may be interpreted as additional insurance payments if climate damages should not only depend on absolute temperature change but also on the rate of temperature change.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (12)

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Working Paper: Efficiency Gains from "What"-Flexibility in Climate Policy: An Integrated CGE Assessment (2004)
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