Authors: McKibbin, Warwick J.¹; Wilcoxen, Peter J.²

Source: The Journal of Economic Perspectives, Volume 16, Number 2, 1 April 2002 , pp. 107-129(23)

Publisher: American Economic Association

Abstract:

The most important characteristic of climate change as a policy problem is uncertainty. From climatology to economics, uncertainties are pervasive, large and difficult to resolve. However, the economic theory of environmental policy under uncertainty provides a clear guide to the design of an appropriate policy. An efficient and practical approach would be a hybrid that incorporates the best features of tradable permits and emissions taxes. Unfortunately, international negotiations have taken a different approach, focusing on rigid targets and timetables for emissions reductions. The result has been the Kyoto Protocol, an agreement with no real chance of reducing greenhouse gas emissions.

Document Type: Research article

DOI: http://dx.doi.org/10.1257/0895330027283

Affiliations: 1: Research School of Pacific and Asian Studies, Australia National University, Canberra, Australia and Brookings Institution, Washington, D.C., USA 2: University of Texas, Austin, Texas and Brookings Institution, Washington, D.C., USA

Publication date: 2002-04-01

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• The Journal of Economic Perspectives (JEP) attempts to fill a gap between the general interest press and most other academic economics journals. The journal aims to publish articles that will serve several goals: to synthesize and integrate lessons learned from active lines of economic research; to provide economic analysis of public policy issues; to encourage cross-fertilization of ideas among the fields of thinking; to offer readers an accessible source for state-of-the-art economic thinking; to suggest directions for future research; to provide insights and readings for classroom use; and to address issues relating to the economics profession.
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