Announced climate policy and the order of resource use

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Title: Announced climate policy and the order of resource use
Authors: Di Maria, Corrado
Van der Werf, Edwin
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Date: Apr-2009
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.
Funding Details: 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
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Language: en
Status of Item: Not peer reviewed
Conference Details: Twenty-second Annual Conference of the Irish Economic Association, Westport, Co. Mayo, 25-27 April 2008
Appears in Collections:Architecture, Planning and Environmental Policy Research Collection

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