Carbon Pricing as an Effective Instrument of Climate Policy: Searching for an Optimal Policy Instrument

Alberto Ansuategi and Ibon Galarraga

Rivista di Politica Economica, 2009, vol. 99, issue 3, 147-169

Abstract: The paper highlights the use of carbon pricing as an effective market tool to control GHG emissions It describes the discussion on the benefits and limitations of both carbon tax and carbon trading. The paper summarises this debate and it argues that, as well as economic effectiveness, many other factors are highly relevant when choosing the right policy instrument. These include political feasibility, impact on competitiveness, institutional requirements, incentives for R&D and many others. Finally, interesting lessons are drawn for policy makers and academics willing to develop such instruments.

Keywords: carbon taxes; cap and trade (search for similar items in EconPapers)
JEL-codes: H00 Q54 Q58 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (4)

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