Public Investment Issues and Efficient Climate Change Policy
Assuming an international policy target aimed at reducing the risks of climate change, I discuss here a special kind of immaterial public Investment, namely investments in knowledge about a new policy Option which appears to be a promising candidate for an efficient international climate change policy, but which was not yet been investigated thoroughly enough for practical application. What I refer to is a so-called international tradeable-quota (TQ) system, a version of which was proposed by the US for the meeting of the Rio Convention Conference-of-the Parties in Kyoto in December, 1997. The required investments in policy knowhow concern not only further theoretical analysis, but also extensive empirical cost studies as well as pilot testing of TQ Systems. The discussion here relates primarily to the last step, how to go about testing the Operation and the political acceptability of TQ Systems.
KeywordsCarbon Emission Government Revenue Marginal Abatement Cost Permit Price Carbon Leakage
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