ENEP426 Chapter Notes - Chapter 18: Grandfather Clause, Carbon Leakage, Collegehumor
14 Mar 2017
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In order to stabilize atmospheric concentrations below 400 parts per million (ppm) carbon dioxide, global carbon emissions may have to be reduced by 75% by 2100 compared with today"s levels. Three categories of policies are central to meeting climate targets cost efficiently. Economy wide price incentives: a carbon tax or cap-and-trade system. Standards for energy efficiency: to correct for market failures associated with asymmetric information, skewed incentive structures, and other barriers to energy efficiency. Policies that rely on price signals are in general more cost efficient than policies that regulate individual companies and their technology choices. Price signals such as a carbon tax have four main advantages. Incentives to shift fuels toward less carbon intensive alternatives. Lead to higher energy prices which increases benefits of improving energy efficiency, choosing less energy intensive ways of life. Offer incentives for private industry to dev new and more advanced carbon dioxide neutral energy technologies.
