Gugler, Klaus, Haxhimusa, Adurim, Liebensteiner, Mario. 2021. Effectiveness of climate policies: Carbon pricing vs. subsidizing renewables. Journal of Environmental Economics and Management. 106 102405
BibTeX
Abstract
Most but not all economists view carbon pricing as most effective to combat carbon emissions, whereas other policies are widely applied and highly debated. We quantify the effectiveness of climate policies in the form of pricing carbon and subsidizing renewable energies for Germany's and Britain's power sectors. While Germany relies on heavy subsidies for renewables but on a weak price for carbon certificates (EUA) from the EU Emission Trading System (ETS), its emissions hardly declined. To underpin the low EUA price, Britain introduced a unilateral tax on power sector emissions, the Carbon Price Support (CPS). Within only five years, carbon emissions declined by 55%. Our results demonstrate that in the power sector, even a modest carbon price (∼€30/tCO2) can induce significant abatement at low costs within a short period as long as “cleaner” gas plants exist to replace “dirty” coal plants. We also find that carbon pricing is superior to subsidizing wind or solar power in these two countries.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | Journal of Environmental Economics and Management |
Citation Index | SSCI |
WU Journalrating 2009 | A |
WU-Journal-Rating new | FIN-A, STRAT-B, VW-B, WH-B |
Language | English |
Title | Effectiveness of climate policies: Carbon pricing vs. subsidizing renewables |
Volume | 106 |
Year | 2021 |
Page from | 102405 |
Reviewed? | Y |
URL | https://www.sciencedirect.com/science/article/pii/S0095069620301297?via%3Dihub |
DOI | https://doi.org/10.1016/j.jeem.2020.102406 |
Open Access | Y |
Open Access Link | http://creativecommons.org/licenses/ by-nc-nd/4.0/ |
JEL | L94 L98 Q35 Q38 Q54 Q58 |
Associations
- People
- Gugler, Klaus (Details)
- External
- Haxhimusa, Adurim (University of Applied Sciences of the Grisons, Centre for Economic Policy Research, Switzerland)
- Liebensteiner, Mario (Friedrich-Alexander University (FAU), Germany)
- Organization
- Research Institute for Regulatory Economics FI (Details)
- Department of Economics (Gugler) (Details)
- Research areas (ÖSTAT Classification 'Statistik Austria')
- 5353 Environmental economics (Details)
- 5370 Industrial economics (Details)