Regional Market-Based Climate Policy in North America: Efficient, Effective, Fair?

Sven Rudolph (), Takeshi Kawakatsu and Achim Lerch
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Sven Rudolph: University of Kassel
Takeshi Kawakatsu: University of Kyoto
Achim Lerch: Hessian University of Cooperative Education

MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: Despite President Obama’s current interest in climate policy, market-based climate policy on the US federal level still appears to be deadlocked. The same is true for Canada, which has aligned its climate policy to the US. However, regional activities are more promising as British Columbia and California have started using market-based approaches recently. Against this background, the paper asks: Can state level market-based climate policy be a sustainable alternative or sup-plement to federal action? Which of the two programs does better in terms of fulfilling ambitious sustainability criteria? How can the programs be improved? In order to answer these questions, in a comparative fashion, the paper analyzes the design and the results of the British Columbia Carbon Tax and the California Cap-and-Trade Program and evaluates them based on sustainability criteria. By doing so, the paper provides a comparative evaluation of two North American sub-national level market-based climate policy programs, shows the significance and the challenges of such regional initiatives, identifies best-practice design elements, and provides recommendations for regional market-based climate policy design.

Keywords: Climate Policy Instruments; Emissions Trading; Carbon Tax; USA; Canada; California; British Columbia (search for similar items in EconPapers)
JEL-codes: D62 D63 Q48 Q54 Q58 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2013
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
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