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Tradable instruments to fight climate change: A disappointing outcome

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  • Philippe Quirion

    (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)

Abstract

Various tradable instruments have been implemented for climate change mitigation: emission trading systems, tradable energy-efficiency obligations, and tradable renewable energy quotas. Their track record has been disappointing so far: almost every emission trading has suffered from over-allocation which has undermined its effectiveness; tradable energy-efficiency obligations seem to have mostly co-financed investments that would have taken place anyway; tradable renewable energy quotas suffer from several shortcomings compared to alternative support systems, i.e., feed-in tariffs and premiums. I discuss the reasons for these failures (especially too superficial a reading of the work of researchers by policy makers) and ways to improve the situation (including encouraging systematic syntheses of academic work).

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  • Philippe Quirion, 2021. "Tradable instruments to fight climate change: A disappointing outcome," Post-Print hal-03495904, HAL.
    • Handle: RePEc:hal:journl:hal-03495904
    DOI: 10.1002/wcc.705
    Note: View the original document on HAL open archive server: https://hal.science/hal-03495904
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    3. Sato, Misato & Rafaty, Ryan & Calel, Raphael & Grubb, Michael, 2022. "Allocation, allocation, allocation! The political economy of the development of the European Union Emissions Trading System," LSE Research Online Documents on Economics 115431, London School of Economics and Political Science, LSE Library.
    4. Horbach, Jens & Rammer, Christian, 2022. "Climate change affectedness and innovation in German firms," ZEW Discussion Papers 22-008, ZEW - Leibniz Centre for European Economic Research.

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