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Announced climate policy and the order of resource use
Author(s)
Date Issued
2009-04
Date Available
2010-06-16T14:07:54Z
Abstract
In this paper we study the optimal extraction of two fossil fuels when the economy
faces an announced constraint on CO2 emissions a la Kyoto. When high- and low-carbon
resources are perfect substitutes, announcement of climate policy induces substitution towards
the high-carbon input whenever this resource is abundant. Emissions can then increase
at the instant of announcement when the future constraint is not too tight, and the
period between announcement and implementation of climate policy is long enough. We
present data that suggest that this effect might have occurred in the German electricity industry
after announcement of the European Union Emissions Trading Scheme.
faces an announced constraint on CO2 emissions a la Kyoto. When high- and low-carbon
resources are perfect substitutes, announcement of climate policy induces substitution towards
the high-carbon input whenever this resource is abundant. Emissions can then increase
at the instant of announcement when the future constraint is not too tight, and the
period between announcement and implementation of climate policy is long enough. We
present data that suggest that this effect might have occurred in the German electricity industry
after announcement of the European Union Emissions Trading Scheme.
Sponsorship
Not applicable
Type of Material
Conference Publication
Publisher
Irish Economic Association
Copyright (Published Version)
2008, The Irish Economic Association
Subject – LCSH
Fossil fuels
Environmental policy--European Union countries
Greenhouse gas mitigation--European Union countries
Language
English
Status of Item
Not peer reviewed
Conference Details
Twenty-second Annual Conference of the Irish Economic Association, Westport, Co. Mayo, 25-27 April 2008
This item is made available under a Creative Commons License
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dimariac_confpap_013.pdf
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Format
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