NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Using the Market to Address Climate Change: Insights from Theory and Experience

Joseph E. Aldy, Robert N. Stavins

NBER Working Paper No. 17488
Issued in October 2011
NBER Program(s):   EEE

Emissions of greenhouse gases linked with global climate change are affected by diverse aspects of economic activity, including individual consumption, business investment, and government spending. An effective climate policy will have to modify the decision calculus for these activities in the direction of more efficient generation and use of energy, lower carbon intensity of energy, and – more broadly – a more carbon-lean economy. The only approach to doing this on a meaningful scale that would be technically feasible and cost-effective is carbon pricing, that is, market-based climate policies that place a shadow-price on carbon dioxide emissions. We examine alternative designs of three such instruments – carbon taxes, cap-and-trade, and clean energy standards. We note that the U.S. political response to possible market-based approaches to climate policy has been and will continue to be largely a function of issues and structural factors that transcend the scope of environmental and climate policy.

download in pdf format
   (258 K)

email paper

This paper is available as PDF (258 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17488

Published: “Using the Market to Address Climate Change: Insights from Theory and Experience.” Daedalus 141(2): 45-60, with Robert N. Stavins, 2012.

Users who downloaded this paper also downloaded these:
Aldy and Pizer w17705 The Competitiveness Impacts of Climate Change Mitigation Policies
Aldy and Stavins w17569 The Promise and Problems of Pricing Carbon: Theory and Experience
Aldy, Krupnick, Newell, Parry, and Pizer w15022 Designing Climate Mitigation Policy
Kotchen, Boyle, and Leiserowitz w17539 Policy-Instrument Choice and Benefit Estimates for Climate-Change Policy in the United States
Fullerton and Wolfram w17499 The Design and Implementation of U.S. Climate Policy: An Introduction
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us