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on Resource Economics |
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Issue of 2008‒09‒13
two papers chosen by |
| By: | Robert N. Stavins (Harvard University) |
| Abstract: | There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an up- stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO2 greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 percent over 25 years. The system provides for linkage with emission reduction credit projects in other countries, harmonization over time with effective cap-and-trade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products. |
| Keywords: | Cap-and-Trade System, Carbon Dioxide, Greenhouse Gas Emissions, Global Climate Change, Carbon Taxes |
| JEL: | Q54 Q28 Q38 Q48 Q58 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.67&r=res |
| By: | Sheila M. Olmstead (Yale School of Forestry and Environmental Studies); Robert N. Stavins (Harvard University) |
| Abstract: | Urban water conservation is typically achieved through prescriptive regulations, including the rationing of water for particular uses and requirements for the installation of particular technologies. A significant shift has occurred in pollution control regulations toward market-based policies in recent decades. We offer an analysis of the relative merits of market-based and prescriptive approaches to water conservation, where prices have rarely been used to allocate scarce supplies. The analysis emphasizes the emerging theoretical and empirical evidence that using prices to manage water demand is more cost-effective than implementing non-price conservation programs, similar to results for pollution control in earlier decades. Price-based approaches also have advantages in terms of monitoring and enforcement. In terms of predictability and equity, neither policy instrument has an inherent advantage over the other. As in any policy context, political considerations are important. |
| Keywords: | Cost-effectiveness, Water Conservation, Market-based Approaches, Policy Instrument Choice, Water Price |
| JEL: | Q25 Q28 Q58 L95 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.66&r=res |