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Overlapping Climate Policies

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  • Perino, Grischa
  • Ritz, Robert
  • van Benthem, Arthur

Abstract

The world is under pressure to deliver on the 2015 Paris Climate Agreement. Individual jurisdictions are enacting policies such as phasing out coal, taxing aviation, and supporting renewable energy. These often overlap with a wider multi-jurisdictional carbon-pricing system like the EU's Emissions Trading System. We develop a general framework to study how such "overlapping climate policies" can help combat climate change--depending on their design, location and timing. Some policies are truly complementary while others backfire by raising aggregate emissions. At a conceptual level, our model encompasses most carbon-pricing systems used in practice and a wide range of popular unilateral policies.

Suggested Citation

  • Perino, Grischa & Ritz, Robert & van Benthem, Arthur, 2022. "Overlapping Climate Policies," CEPR Discussion Papers 13569, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13569
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    More about this item

    Keywords

    Overlapping policy; Internal carbon leakage; Waterbed effect; Cap-and-trade; Carbon pricing; Hybrid regulation;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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