Environmental and technology policies for climate mitigation
Abstract
We assess different policies for reducing carbon dioxide emissions and promoting innovation
and diffusion of renewable energy. We evaluate the relative performance of policies
according to incentives provided for emissions reduction, efficiency, and other outcomes.
We also assess how the nature of technological progress through learning and research
and development (R&D), and the degree of knowledge spillovers, affects the desirability
of different policies. Due to knowledge spillovers, optimal policy involves a portfolio
of different instruments targeted at emissions, learning, and R&D. Although the relative
cost of individual policies in achieving reductions depends on parameter values and
the emissions target, in a numerical application to the U.S. electricity sector, the
ranking is roughly as follows: (1) emissions price, (2) emissions performance standard,
(3) fossil power tax, (4) renewables share requirement, (5) renewables subsidy, and
(6) R&D subsidy. Nonetheless, an optimal portfolio of policies achieves emissions
reductions at a significantly lower cost than any single policy. © 2007 Elsevier Inc.
All rights reserved.
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https://hdl.handle.net/10161/6623Published Version (Please cite this version)
10.1016/j.jeem.2007.11.001Publication Info
Fischer, C; & Newell, RG (2008). Environmental and technology policies for climate mitigation. Journal of Environmental Economics and Management, 55(2). pp. 142-162. 10.1016/j.jeem.2007.11.001. Retrieved from https://hdl.handle.net/10161/6623.This is constructed from limited available data and may be imprecise. To cite this
article, please review & use the official citation provided by the journal.
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Show full item recordScholars@Duke
Richard G. Newell
Adjunct Professor
Dr. Richard G. Newell is the President and CEO of Resources for the Future (RFF),
an independent, nonprofit research institution that improves environmental, energy,
and natural resource decisions through impartial economic research and policy engagement.
From 2009 to 2011, he served as the administrator of the US Energy Information Administration,
the agency responsible for official US government energy statistics and analysis.
Dr. Newell is an adjunct professor at Duke University, where he

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