Book contents
- Frontmatter
- Contents
- Preface
- Acknowledgements
- Introduction
- Summary of Conclusions
- Part I Climate Change – Our Approach
- Part II Impacts of Climate Change on Growth and Development
- Part III The Economics of Stabilisation
- Part IV Policy Responses for Mitigation
- 14 Harnessing Markets for Mitigation – The Role of Taxation and Trading
- 15 Carbon Pricing and Emissions Markets in Practice
- 16 Accelerating Technological Innovation
- 17 Beyond Carbon Markets and Technology
- Part V Policy Responses for Adaptation
- Part VI International Collective Action
- Abbreviations and Acronyms
- Postscript
- Technical Annex to Postscript
- Index
17 - Beyond Carbon Markets and Technology
Published online by Cambridge University Press: 05 March 2014
- Frontmatter
- Contents
- Preface
- Acknowledgements
- Introduction
- Summary of Conclusions
- Part I Climate Change – Our Approach
- Part II Impacts of Climate Change on Growth and Development
- Part III The Economics of Stabilisation
- Part IV Policy Responses for Mitigation
- 14 Harnessing Markets for Mitigation – The Role of Taxation and Trading
- 15 Carbon Pricing and Emissions Markets in Practice
- 16 Accelerating Technological Innovation
- 17 Beyond Carbon Markets and Technology
- Part V Policy Responses for Adaptation
- Part VI International Collective Action
- Abbreviations and Acronyms
- Postscript
- Technical Annex to Postscript
- Index
Summary
KEY MESSAGES
Policies to price greenhouse gases, and support technology development, are fundamental to tackling climate change. However, even if these measures are taken, barriers and market imperfections may still inhibit action, particularly on energy efficiency.
These barriers and failures include hidden and transaction costs such as the cost of the time needed to plan new investments; lack of information about available options; capital constraints; misaligned incentives; as well as behavioural and organisational factors affecting economic rationality in decision-making.
These market imperfections result in significant obstacles to the uptake of cost-effective mitigation, and weakened drivers for innovation, particularly in markets for energy efficiency measures.
Policy responses which can help to overcome these barriers in markets affecting demand for energy include:
Regulation: Regulation has an important role, for example in product and building markets by: communicating policy intentions to global audiences; reducing uncertainty, complexity and transaction costs; inducing technological innovation; and avoiding technology lock-in, for example where the credibility of carbon markets is still being established.
Information: Policies to promote: performance labels, certificates and endorsements; more informative energy bills; wider adoption of energy use displays and meters; the dissemination of best practice; or wider carbon disclosure help consumers and firms make sounder decisions and stimulate more competitive markets for more energy efficient goods and services.
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- Type
- Chapter
- Information
- The Economics of Climate ChangeThe Stern Review, pp. 427 - 454Publisher: Cambridge University PressPrint publication year: 2007