Pathways for the evolution of climate policy instruments

This document explores the different choices of policy instruments that the EU could select to reduce its GHG emissions by 80% compared to 1990 levels in 2050. It presents three different policy packages that could be implemented to achieve this reduction, each including carbon pricing as well as policies to promote technological and behavioural change: a market driven pathway based on economic instruments with the EU ETS as its centrepiece, a technology-specific pathway, and a pathway that builds primarily on the mitigation potential of behavioural change. To assess the plausibility of the policy packages, the authors analyse each pathway within the context of four governance scenarios that differ with regard to the degree of EU integration and international ambition. Finally, the authors evaluate the “optimality” of the policy pathways, by drawing on the notion of optimality that underlies the CECILIA2050 project and is based on the three of criteria environmental effectiveness, cost-effectiveness, and practical feasibility.

Attachment: 

Citation: 

Rey, Luis; Gonzalez-­‐Eguino, Mikel; Markandya, Anil, 2014. Pathways for the evolution of climate policy instruments. WP4 Deliverable 4.1. Bilbao: BC3 Basque Centre for Climate Change.

Funding: 

European Commission

Authors: 

Luis Rey, BC3; Mikel Gonzalez-­‐Eguino, BC3; Anil Markandya, BC3

Year of publication: 

2014

Number of pages: 

24

Table of contents: 

1.

Introduction

4

2.

Climate policy pathways

6

2.1.

Market driven pathway

7

2.2.

Technology-specific pathway

9

2.3.

Behavioural-driven pathway

11

3.

Governance scenarios

15

3.1.

EU centralised with global ambition

15

3.2.

EU decentralised with global ambition

16

3.3.

EU centralised with global fragmentation

17

3.3.

EU decentralised with global fragmentation

17

4.

Evaluation of the different scenarios

18

4.1.

Environmental effectiveness

20

4.2.

Cost effectiveness

21

4.3.

Feasibility

22

 

References

24