Market-based instruments and environmental policies - Grantham Research Institute on climate change and the environment

Choosing appropriate policy instruments is an important element of successful regulation, including on climate change. Once objectives are agreed and suitable targets adopted, policy-makers can employ command-and-control regulation and/or economic instruments, and choose between fixing a price or a quantity. This research stream investigates the relative advantages of price, quantity, and hybrid instruments for reducing carbon emissions focusing on the following areas: efficiency under uncertainty; the trade-off between credible commitment and flexibility; implementation; international considerations; and political economy.

Publications:

Comendant, C., Taschini, L., 2014 Submission to the inquiry by the House of Commons Select Committee on Energy and Climate Change on ‘Linking Emissions Trading Systems’. Link to paper

Grüll, G., Taschini, L., 2011. Cap-and-trade properties under different hybrid scheme designs. Journal of Environmental Economics and Management, 61 (1) pp.107–118. External link to paper

Parsons, J., Taschini, L., 2013. The role of stocks and shocks concepts in the debate over price vs. quantity. Environmental and Resource Economics, May 2013, Volume 55, Issue 1, pp 71-86
– External link to published paper
– Link to 2011 working paper

Taschini, L., Chesney, M., Wang, M., 2014. Experimental comparison between markets on dynamic permit trading and investment in irreversible abatement with and without non-regulated companies. Journal of Regulatory Economics, 46 (1) pp.23-50. External link to paper

Grull, G., Taschini, L., 2012. Linking emissions trading schemes. Economics of Energy & Environmental Policy, 1 (3), pp.31-38. External link to paper