Efficiency and Acceptability of Climate Policies: Race Against the Lock-Ins

9 Pages Posted: 25 Nov 2013

See all articles by Julie Rozenberg

Julie Rozenberg

CIRED, International Research Center on Environment & Development, France

Adrien Vogt-Schilb

CIRED, Centre international de recherche sur l’environnement et le développement

S. Hallegatte

World Bank

Date Written: November 21, 2013

Abstract

Policymakers have good reasons to favor capital-based policies - such as CAFE standards or feebates programs - over a carbon price. A carbon price minimizes the discounted cost of a climate policy, but may result in existing capital being under-utilized or scrapped before its scheduled lifetime, hurt the workers that depend on it, and inflict an immediate income drop. Capital-based policies avoid these obstacles, but can reach a given climate target only if implemented early enough. Delaying mitigation policies may thus create a political-economy lock-in (easier-to-implement policies become unavailable) in addition to the economic lock-in (the target becomes more expensive).

Keywords: Intergenerational Equity, Sectoral Policies, Mothballing

JEL Classification: L50, O44, Q52, Q54, Q58

Suggested Citation

Rozenberg, Julie and Vogt-Schilb, Adrien and Hallegatte, Stephane, Efficiency and Acceptability of Climate Policies: Race Against the Lock-Ins (November 21, 2013). Review of Environment, Energy and Economics (Re3), Forthcoming. Available at SSRN: https://ssrn.com/abstract=2358501

Julie Rozenberg (Contact Author)

CIRED, International Research Center on Environment & Development, France ( email )

Campus du Jardin Tropical
45 bis avenue de la Belle Gabrielle
F94736 Nogent sur Marne Cedex
France

Adrien Vogt-Schilb

CIRED, Centre international de recherche sur l’environnement et le développement ( email )

France

Stephane Hallegatte

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States

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