Second-best instruments for energy and climate policy

Xavier Labandeira () and Pedro Linares ()

Working Papers from Economics for Energy

Abstract: The debate seems to be well settled among economists in that the best policy instrument to reduce carbon emissions is a carbon tax. However and surprisingly, most of these discussions have taken place in a firstbest setting. We think instead that second-best settings should be incorporated to the analysis with at least the same level of rigor. Therefore, a careful assessment under second-best conditions of all the available instruments, and their combination, seems well deserved. Here we build on the existing literature and try to provide an integrated, although preliminary approach, merging efficiency with other concerns, with the final goal of giving indications on which instrument, or instruments, seem better suited for climate policy.

Pages: 17 pages
Date: 2010-11
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:efe:wpaper:06-2010

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