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7 - Market-based Economic Instruments

Published online by Cambridge University Press:  19 December 2024

Massimo Filippini  and
Suchita Srinivasan
Massimo Filippini
Affiliation:
ETH Zürich and Università della Svizzera Italiana
Suchita Srinivasan
Affiliation:
ETH Zürich
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Summary

In this chapter, we first provide a general overview of energy and climate policy goals and their main instruments. We underline the common goals between energy and climate policy, as well as possible conflicts in objectives. In the next part, we illustrate monetary market-based instruments such as pollution taxes, product taxes, and energy taxes, as well as subsidies and pollution permit trading systems. We also discuss, using figures, the implications of behavioural anomalies on the effectiveness of these types of policy instruments. At the end of the chapter, we introduce non-monetary market-based instruments, giving some weight to nudges. At the end of the chapter, we discuss issues in developing countries related to the topics discussed in the chapter.

Keywords

energy and climate policy goalsmarket failuresmarket-oriented policy instrumentsmonetary instrumentsnon-monetary instrumentsenvironmental taxesenergy taxessubsidiesnudges
Type
Chapter
Information
An Introduction to Energy Economics and Policy , pp. 162 - 202
Publisher: Cambridge University Press
Print publication year: 2024
Creative Commons
Creative Common License - CCCreative Common License - BYCreative Common License - NCCreative Common License - ND
This content is Open Access and distributed under the terms of the Creative Commons Attribution licence CC-BY-NC-ND 4.0 https://creativecommons.org/cclicenses/

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