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Taxes vs Permits: Options for Price-Based Climate Change Regulation

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Abstract

This paper provides an overview of key issues involved in the choice among market-based instruments for climate change policy. Specifically, it examines the potential net benefits from shifting to a permit system for emission reduction, and the preconditions necessary for this change. It also draws out the implications of New Zealand’s specific circumstances and current climate policies for future policy development.

Suggested Citation

  • Isabelle Sin & Suzi Kerr & Joanna Hendy, 2005. "Taxes vs Permits: Options for Price-Based Climate Change Regulation," Treasury Working Paper Series 05/02, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:05/02
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    File URL: https://treasury.govt.nz/sites/default/files/2007-09/twp05-02.pdf
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    References listed on IDEAS

    as
    1. Cramton, Peter & Kerr, Suzi, 2002. "Tradeable carbon permit auctions: How and why to auction not grandfather," Energy Policy, Elsevier, vol. 30(4), pages 333-345, March.
    2. Suzi Kerr, 2003. "Allocating Risks in a Domestic Greenhouse Gas Trading System," Others 0309003, University Library of Munich, Germany.
    3. Lawrence H. Goulder & Ian W.H. Parry & Roberton C. Williams III & Dallas Burtraw, 2002. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 27, pages 523-554, Edward Elgar Publishing.
    4. Kenneth J. Arrow & Robert C. Lind, 1974. "Uncertainty and the Evaluation of Public Investment Decisions," Palgrave Macmillan Books, in: Chennat Gopalakrishnan (ed.), Classic Papers in Natural Resource Economics, chapter 3, pages 54-75, Palgrave Macmillan.
    5. Suzi Kerr & Emma Brunton & Ralph Chapman, 2004. "Policy to Encourage Carbon Sequestration in Plantation Forests," Working Papers 04_05, Motu Economic and Public Policy Research.
    6. Suzi Kerr (ed.), 2000. "Global Emissions Trading," Books, Edward Elgar Publishing, number 2145.
    7. Suzi Kerr, 2003. "Indigenous Forests and Forest Sink Policy in New Zealand," Working Papers 03_15, Motu Economic and Public Policy Research.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Axel Michaelowa & John O’brien, 2006. "Domestic UNFCCC Kyoto Protocol Mechanisms Project Supply Coordination Through Tendering – Lessons from the New Zealand Experience," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 11(3), pages 711-722, May.

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    More about this item

    Keywords

    climate change; emissions trading; permits; taxation; New Zealand;
    All these keywords.

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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