Cost, innovation, and emissions leakage from overlapping climate policy
Abstrak
Jurisdictions have implemented a variety of policy instruments to mitigate greenhouse gas emissions. However, interactions between overlapping climate policies can lead to unintended impacts. This study examines how interactions between two policies in California, the low-carbon fuel standard and cap-and-trade program, impact emissions, costs, and innovation. Simulations using a computable general equilibrium model suggest that interactions between an LCFS and an emissions cap can result in higher emissions and higher average abatement costs relative to an emissions cap alone. Emissions increase as a result of the LCFS incentivizing greater production of alternative transportation fuels with upstream production emissions in sectors not covered by the emissions cap. Inter-industry emissions leakage can be mitigated by incorporating elements of a fixed-price instrument (i.e. carbon price floor/ceiling) to improve policy complementarity or requiring an obligation for the lifecycle GHG emissions of fuels under the emissions cap.
Penulis (1)
William A. Scott
Akses Cepat
- Tahun Terbit
- 2024
- Bahasa
- en
- Total Sitasi
- 5×
- Sumber Database
- Semantic Scholar
- DOI
- 10.1016/j.eneco.2024.107949
- Akses
- Open Access ✓