Upstream versus Downstream Implementation of Climate Policy

Erin Mansur

No 16116, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This chapter examines the tradeoffs of regulating upstream (e.g., coal, natural gas, and refined petroleum product producers) versus regulating downstream (e.g., direct sources of greenhouse gases (GHG)). In general, regulating at the source provides polluters with incentives to choose among more opportunities to abate pollution. This chapter develops a simple theoretical model that shows why this added flexibility achieves the lowest overall costs. I broaden the theory to incorporate several reasons why these potential gains from trade may not be realized--transactions costs, leakage, and offsets--in the context of selecting the vertical segment of regulation.

JEL-codes: Q4 Q5 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published as Upstream versus Downstream Implementation of Climate Policy , Erin T. Mansur. in The Design and Implementation of US Climate Policy , Fullerton and Wolfram. 2012

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Chapter: Upstream versus Downstream Implementation of Climate Policy (2011)
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