Monetary Valuation of Emissions in Implementing Environmental Policy

At various levels of environmental policy making there is a demand to translate polluting emissions into monetary units. In the so‐called reduction cost approach, based upon policy targets, polluting emissions are expressed in monetary terms by determination of the marginal unit reduction cost at the emission target level. This approach provides shadow prices for emissions by which it can be established whether a certain measure or technology belongs to the most efficient set of measures by which the policy targets can be reached. This article argues that, if clear (generic) government targets such as national emission reduction targets exist for an emission, shadow prices derived by this method are to be preferred to shadow prices derived by other methods for decisions at the project (implementation) level. By application of the reduction cost approach, implementation decisions can be made that are both cost‐effective and consistent with government policy

Economics · Environmental economics · Environmental policy · Greenhouse gas · Industrial ecology · Macroeconomics · Marginal abatement cost · Marginal cost · Microeconomics · Monetary policy · Natural resource economics · Public economics · Shadow price · Sustainability · Climate Change Policy and Economics · Economic and Environmental Valuation · Fiscal Policy and Economic Growth · Finance

• A Framework for Quantified Eco‐efficiency Analysis

  Open Access•Gjalt Huppes, Masanobu Ishikawa•Journal of Industrial Ecology•2005

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