Economics at your fingertips  


Iris Staub-Kaminski, Anne Zimmer (), Michael Jakob () and Robert Marschinski
Additional contact information
Iris Staub-Kaminski: Potsdam Institute for Climate Impact Research, P.O. Box 60 12 03, 14412 Potsdam, Germany
Anne Zimmer: Potsdam Institute for Climate Impact Research, P.O. Box 60 12 03, 14412 Potsdam, Germany

Climate Change Economics (CCE), 2014, vol. 05, issue 01, 1-30

Abstract: The implementation of mitigation policies will be complicated by several real-world imperfections ("second-best conditions") and constraints typically not included in the more idealized economies assumed in Integrated Assessment Models (IAMs), based on which such policies are derived. But which of these numerous imperfections found in real economies are actually relevant in this context? And how could they — in principle — be taken into account by IAMs? Based on a literature review, we propose a typology of three categories of obstacles inhibiting "first-best" conditions and outcomes: first, obstacles impeding the setting of least-cost abatement incentives; second, obstacles limiting the supply and exploitation of abatement options; and, third, obstacles creating distortions between the price and marginal costs of abatement. By reviewing the implementation of energy policy in China, we put our typology into practice and identify specific empirical evidence for each category. IAMs in principle can (and in practice often do) incorporate several relevant obstacles by means of additional cost or quantity constraints. However, the nature of some obstacles relating to strategic interactions between economic agents appears to be incompatible with the standard representative agent social-planner framework often employed in IAMs, suggesting a need for complementary analysis with decentralized "Integrated Policy Assessment Models".

Keywords: Climate policy; barriers; second-best; climate change mitigation; Integrated Assessment Models (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
Access to full text is restricted to subscribers

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:

Ordering information: This journal article can be ordered from

DOI: 10.1142/S2010007814400041

Access Statistics for this article

Climate Change Economics (CCE) is currently edited by Robert Mendelsohn

More articles in Climate Change Economics (CCE) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().

Page updated 2023-06-15
Handle: RePEc:wsi:ccexxx:v:05:y:2014:i:01:n:s2010007814400041