The Promise and Problems of Pricing Carbon: Theory and Experience

Joseph Aldy and Robert Stavins

No 17569, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Because of the global commons nature of climate change, international cooperation among nations will likely be necessary for meaningful action at the global level. At the same time, it will inevitably be up to the actions of sovereign nations to put in place policies that bring about meaningful reductions in the emissions of greenhouse gases. Due to the ubiquity and diversity of emissions of greenhouse gases in most economies, as well as the variation in abatement costs among individual sources, conventional environmental policy approaches, such as uniform technology and performance standards, are unlikely to be sufficient to the task. Therefore, attention has increasingly turned to market-based instruments in the form of carbon-pricing mechanisms. We examine the opportunities and challenges associated with the major options for carbon pricing: carbon taxes, cap-and-trade, emission reduction credits, clean energy standards, and fossil fuel subsidy reductions.

JEL-codes: D02 F18 H23 K32 L38 Q28 Q48 Q5 Q54 Q58 (search for similar items in EconPapers)
Date: 2011-11
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: EEE IO LE PE
References: View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published as “The Promise and Problems of Pricing Carbon: Theory and Experience.” Journal of Environment and Development 21(2): 152-180, with Robert N. Stavins, 2012.

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Related works:
Working Paper: The Promise and Problems of Pricing Carbon: Theory and Experience (2011)
Working Paper: The Promise and Problems of Pricing Carbon: Theory and Experience (2011)
Working Paper: The Promise and Problems of Pricing Carbon: Theory and Experience (2011)
Working Paper: The Promise and Problems of Pricing Carbon: Theory and Experience (2011)
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