ANALYSIS: Untangling the policy puzzle – Winning ways to combine carbon markets and energy efficiency

Published 17:44 on March 23, 2018  /  Last updated at 17:44 on March 23, 2018  /  Americas, Asia Pacific, EMEA, EU ETS, US  /  2 Comments

Heightened efforts worldwide to drive emission cuts and boost energy savings are risking tangling companies up in costly red tape and ineffective incentives, but unlikely solutions could be found in a decades-old market and a policy on the verge of being abandoned.

Heightened efforts worldwide to drive emission cuts and boost energy savings are risking tangling companies up in costly red tape and ineffective incentives, but unlikely solutions could be found in a decades-old market and a policy on the verge of being abandoned.

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2 Comments

  1. This analysis does not necessarily present a comprehensive overview of the latest thinking on policy overlap. I would strongly suggest to update this with the analysis done, for example, by Christina Hood (IEA) in “Summing up the parts” and following studies. There is a new longer study planned on low-carbon policy interactions for release in 2018.

    • Interesting comment. The “Summing up the Parts” paper cited was published in 2011, which is not the most recent thinking on this subject. I will be interested to see what is in the 2018 report. The discussion of energy efficiency overlap in “Summing up the Parts” is a theoretical discussion of why energy efficiency isn’t adopted more based on the tenant/landlord dilemma, asymmetries of information, and other behavioral reasons. Updated thinking on this topic can be found in the December 2017 “Assessing the Energy Efficiency Gap” paper by Gerarden, Newell, and Stavins and is quoted in this Carbon Pulse analysis. Also, it should be noted that this article was not meant to be a comprehensive overview or summary of the theory on the topic, but instead was meant to illuminate how some markets use tradable instruments to support energy efficiency, what issues those markets have faced, and how future markets could allow for energy-saving certificate trading with less policy redundancy and no double counting.

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