Efficiency Gains from "What"-Flexibility in Climate Policy: An Integrated CGE Assessment

Christoph Böhringer, Andreas Löschel and Thomas Rutherford ()

No 04-48, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: We investigate the importance of ?what?-flexibility on top of ?where?- and ?when?-flexibility for alternative emission control schemes that prescribe long-term temperature targets and eventually impose additional constraints on the rate of temperature change. We find that ?what?-flexibility substantially reduces the compliance costs under alternative emission control schemes. When comparing policies that simply involve long-term temperature targets against more stringent strategies that include additional constraints on the rate of temperature increase, it turns out that the latter involve huge additional costs. These costs may be interpreted as additional insurance payments if damages should not only dependent on absolute temperature change but also on the rate of temperature change.

Keywords: Climate policy; Integrated Assessment; What-flexibility (search for similar items in EconPapers)
JEL-codes: D58 Q43 (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Efficiency Gains from "What"-Flexibility in Climate Policy An Integrated CGE Assessment (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:2355

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