 The importance of the design of market-based instruments for CO2 mitigation: An AGE analysis for SpainEcological Economics, 2011, vol. 70, issue 12, 2292-2302 Abstract: In the past few decades, economists have defended the use of market-based instruments (MBI) in environmental and climate policy. There have been many papers which have compared the costs of attaining environmental objectives with MBIs and with command and control instruments. However very few have compared different MBIs in examining these costs. This paper seeks to analyse various MBIs for CO2 mitigation from the viewpoint of cost-effectiveness, using an AGE (applied general equilibrium) model for the case of Spain. A distinction is drawn between (1) quantity instruments, which represent different extents of a market for emission permits; and (2) price instruments, which represent different types of tax. Each instrument can affect different segments of the emission sources and therefore can have very different effects on the economy as a whole. We show how MBI can help to minimise mitigation costs, but also how taxes and tradable emission permits that are limited or constrained by many exemptions and distortions can raise costs considerably. Keywords: Environmental policy instruments; Market-based instruments; Mitigation cost; General equilibrium analysis; Spain (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:70:y:2011:i:12:p:2292-2302 DOI: 10.1016/j.ecolecon.2011.05.023 Access Statistics for this article Ecological Economics is currently edited by C. J. Cleveland More articles in Ecological Economics from Elsevier |
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