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Barriers to the introduction of market-based instruments in climate policies: an integrated theoretical framework

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  • Pablo Río

    (Centro de Ciencias Humanas y Sociales, CSIC)

  • Xavier Labandeira

    (Universidade de Vigo)

Abstract

Many economists propose the superiority of market-based instruments, and an increasing use of such measures in OECD countries has taken place. However, there has been (and still is) some reluctance by policymakers to use market-based instruments in climate policy. This article provides a theoretical framework to help explain this paradox. This framework combines standard environmental economics reasoning with two economic approaches: the institutional path dependence and the public choice perspectives, complemented with some insights from political science studies. Ex post empirical research using the Spanish case illustrates the accuracy and policy relevance of our approach. Analyzing the barriers to market-based measures in climate policy may allow us to draw lessons to facilitate the implementation of these instruments in the future.

Suggested Citation

  • Pablo Río & Xavier Labandeira, 2009. "Barriers to the introduction of market-based instruments in climate policies: an integrated theoretical framework," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 10(1), pages 41-68, March.
    • Handle: RePEc:spr:envpol:v:10:y:2009:i:1:d:10.1007_bf03353978
    DOI: 10.1007/BF03353978
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    Cited by:

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    4. Burtraw, Dallas & Woerman, Matt, 2013. "Economic ideas for a complex climate policy regime," Energy Economics, Elsevier, vol. 40(S1), pages 24-31.

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