Designing an effective climate-policy mix

Accounting for instrument synergy

Bibliographic Data

ID23367637
AuthorsJ C J M Van Den Bergh (0000-0003-3415-3083, Universitat Autonòma de Barcelona, corresponding author), J Castro (0000-0003-2256-9532, Universitat Autonòma de Barcelona), Stefan Drew (0000-0001-6393-3121, Universitat Autonòma de Barcelona), S Drews (Universitat Autonòma de Barcelona), Filippos Exadaktylos (0000-0001-7339-8847, Universitat Autonòma de Barcelona), Joël Foramitti (0000-0002-4828-7288, Universitat Autonòma de Barcelona), Franziska Klein (0000-0001-6968-6213, Universitat Autonòma de Barcelona), Théo Konc (0000-0002-0203-9473, Universitat Autonòma de Barcelona), Igor Savin (0000-0002-9469-0510, Universitat Autonòma de Barcelona)
Year2021
Volume21
Issue6
Pages745-764
Publication date2021-07-03
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueClimate Policy (JOURNAL)
Journal identifiersISSN: 1469-3062 • E-ISSN: 1752-7457
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/14693062.2021.1907276
OpenAlexW3148150095
LanguageEN
Citations received56
References cited141

We assess evidence from theoretical-modelling, empirical and experimental studies on how interactions between instruments of climate policy affect overall emissions reduction. Such interactions take the form of negative, zero or positive synergistic effects. The considered instruments comprise performance and technical standards, carbon pricing, adoption subsidies, innovation support, and information provision. Based on the findings, we formulate climate-policy packages that avoid negative and employ positive synergies, and compare their strengths and weaknesses on other criteria. We note that the international context of climate policy has been neglected in assessments of policy mixes, and argue that transparency and harmonization of national policies may be key to a politically feasible path to meet global emission targets. This suggests limiting the complexity of climate-policy packages.Key policy insights Combining technical standards or targets, such as renewable-energy quota, or adoption subsidies with a carbon market can produce negative synergy, up to the point of adding no emissions reduction beyond the cap. For maximum emissions reduction, renewable energy policy should be combined with carbon taxation and target expensive reduction options not triggered by the tax.Evidence regarding synergy of information provision with pricing is mixed, indicating a tendency for complementary roles (zero synergy). Positive synergy is documented only for cases where information provision improves effectiveness of price instruments, e.g. by stimulating social imitation of low-carbon choices.We conclude that the most promising packages are combining innovation support and information provision with either a carbon tax and adoption subsidy, or with a carbon market. We further argue that the latter could have stronger potential to harmonize international policy, which would allow to strengthen mitigation policy over time.

Business · Carbon tax · Climate change mitigation · Context (archaeology) · Economics · Environmental economics · Greenhouse gas · Harmonization · Macroeconomics · Policy mix · Public economics · Renewable energy · Subsidy · Transparency (behavior) · Climate Change Policy and Economics · Energy, Environment, and Transportation Policies · Energy, Environment, Economic Growth