Facebook LinkedIn Twitter

IAEE Members and subscribers to The Energy Journal: Please log in to access the full text article or receive discounted pricing for this article.

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

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 economic adjustment costs. When comparing policies that simply involve long-term temperature targets against more stringent strategies with constraints on the rate of temperature increase, it turns out that the latter involve much higher costs. The cost difference may be interpreted as additional insurance payments if climate damages should not only depend on absolute temperature change but also on the rate of temperature change.

Purchase ( $25 )

Energy Specializations: Energy Modeling – Integrated Assessment Modeling; Energy and the Environment – Policy and Regulation

JEL Codes:
Q43 - Energy and the Macroeconomy
E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General

Keywords: Climate policy, Integrated CGE Assessment, Efficiency gains, Cost efficient abatement

DOI: 10.5547/ISSN0195-6574-EJ-VolSI2006-NoSI3-21

Published in Multi-Greenhouse Gas Mitigation and Climate Policy, Special Issue #3 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.