Setting the initial time-profile of climate policy
Subtitle: the economics of environmental policy phase-ins
By: Roberton C. Williams III
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 16120; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16120.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] :
Description: "This paper considers the question of under what circumstances a new environmental regulation should "phase in" gradually over time, rather than being immediately implemented at full force.  The paper focuses particularly on climate policy, though its insights are more general.  It shows that while adjustment costs provide a strong efficiency argument for phasing in a quantity-based regulation (or allowing intertemporal flexibility that creates the equivalent of a phase-in), this argument does not apply for price-based regulation.  Indeed, in many cases, it will be more efficient to do just the opposite, setting an initially very high emissions price that then falls as the policy phases in.  This difference in results comes not from any fundamental difference between price and quantity policies: under either policy, the efficient quantity of abatement rises over time, while the efficient price stays constant or even falls.  But other considerations, such as distributional concerns or monitoring and enforcement issues, may still argue for a gradual phase-in even for a price-based policy"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 7/13/2010.

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