Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/72953
Authors: 
Lecuyer, Oskar
Quirion, Philippe
Year of Publication: 
2012
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 91.2012
Abstract: 
This article constitutes a new contribution to the analysis of overlapping instruments to cover the same emission sources. Using both an analytical and a numerical model, we show that when the risk that the CO2 price drops to zero and the political unavailability of a CO2 tax (at least in the European Union) are taken into account, it can be socially optimal to implement an additional instrument encouraging the reduction of emissions, for instance a renewable energy subsidy. Our analysis has both a practical and a theoretical purpose. It aims at giving economic insight to policymakers in a context of increased uncertainty concerning the future stringency of the European Emission Trading Scheme. It also gives another rationale for the use of several instruments to cover the same emission sources, and shows the importance of accounting for corner solutions in the definition of the optimal policy mix.
Subjects: 
Uncertainty
Policy Overlapping
Mitigation Policy
Energy policy
EU-ETS
Renewable Energy
Corner Solutions
Nil CO2 Price
JEL: 
Q28
Q41
Q48
Q58
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.