Description
Book SynopsisEconomic Policy and Climate Change focuses on the design, implementation and consequences of a feasible system of tradable carbon permits to reduce greenhouse gas emissions within the context of the European Union.
Economic instruments are considered fundamental in reducing atmospheric pollution, especially carbon dioxide emissions. This important book outlines the design of an achievable system of tradable emission permits in the EU. It considers the distribution of permits, the problem of monitoring and enforcement and the possibility that the system might create a barrier to potential entrants to industry. This is especially important because entry barriers will affect the whole economy and long-term industry dynamics. The analysis then extends to consider the use of tradable permits and taxes in the context of international cooperation on emissions reduction. International agreements are examined within the framework of a second-best, two country model in which governments reduce emissions and raise revenue simultaneously. The author concludes that it is not welfare-maximizing to trade permits between countries if emission limits and side-payments have not first been agreed.
This book will be of special interest to environmental economists, environmentalists and policymakers.
Trade Review'I found Koutstaal's approach a useful contribution to the debate. . . I think that this book will be a very interesting introduction to the design of environmental economic instruments to policymakers interested in the use of them at an international level.'Table of ContentsContents: 1. Introduction 2. Designing a System of Tradable Carbon Permits for the EU 3. Entry Barriers and Tradable Permits: Overview and Transaction Costs 4. Entry Barriers and Tradable Permits: Imperfect Capital Markets and Exclusion 5. Coordination of Environmental Policy in a Second-best World 6. Tradable Permits and Coordination of Environmental Policy in a Second-best World 7. Conclusions Index
