The Economics of "When" Flexibility in the Design of Greenhouse Gas Abatement Policies

33 Pages·2015·0.12 MB·English

The Economics of "When" Flexibility
in the Design of Greenhouse Gas
Abatement Policies
Michael A. Toman
Richard D. Morgenstern
John Anderson
Discussion Paper 99-38-REV
May 1999
Revised June 1999
1616 P Street, NW
Washington, DC 20036
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permission of the authors.
Discussion papers are research materials circulated by their
authors for purposes of information and discussion. They
have not undergone formal peer review or the editorial
treatment accorded RFF books and other publications.
The Economics of "When" Flexibility in the Design of Greenhouse
Gas Abatement Policies
leahciM .A ,namoT drahciR .D ,nretsnegroM dna nhoJnosrednA
Abstract
myrtei tl sf - iyeost rbl sir eeaeduhocnhprvecThi otaii xosmdpsteifoneahfnadltoecre
s.sele dol nicb l s ivoaeoo et ottsctd hesroeuoonetgaprmotyahrgPihoKTatnrtePerg
y etssi eu ll ,so, nioel ahdhi brroog necnitertdetiaxnhtnenhceowntarew lcoagmefchebwlpmi
yt in sl ilei.s e orb d e,rwcuit eyhora oosxoesccdeclt aenhuiuviloeltlmetarmfowsPpoeHmod
.lsalt ansoe ngm eone ki ocm at nrarrtcto i leouiinvsnptNdusinee- esseohrfrridweoumgpenol
ydceislaob p-h egs cutlioearrgtphrntaetmn omrrievtn- er teewitl orbeloirlhxoasemlf
y t .ie sl cltisnasblat oiai ndcxoleenegpvma lminef otohnseca rTitcltinneavearhnmlteuarbtsni
yg o,d l e es,a mvncttn yoiianratarr leacmf ea ep mpeodlssheptoeitl schmiefe otworethotrP
t r leo ou sfrttfsafeus Che doseFp gneuCydnuc s lniceslnham uhiaegrestbeiahowhwtltgeb
.yl toyica lo mlei tg abbeon keeihri r "chrx TPveeanatt efehielnoyloitrhotefhrwMkca"ab
de nyitnaii rlsytii lsb"rni eaoxrfsrlceeileuld ahc fa,owifolg"toro r bceaoohptttooyrKP
g.nli otecnhoettmoerlPpmi
yeKsdroW loco to ot,royPyc Kielg onepatha cm:ilc
snroeibtmaucNi fLiEsJsalC : Q28
ii
Table of Contents
1. noitcudortnI ................................ ................................ ................................ ................. 1
2. wei vnrAevO yti lsi tb ynir cexocimefilul mogFfoPronAocE ................................ ....... 3
3. ycam ollaptin De: mssoneewol s Trbfasiao CtvtdenengEmariaTT ............................... 6
4. yt is lcn i ii t bgmfeneinoohehxin tmTemofelicotFTEabA ................................ .......... 12
5. yyntcgiiil l sisodfebtPnoDieaxgerlaFT ................................ ................................ ..... 17
6. snoisulcnoC ................................ ................................ ................................ ................ 24
secnerefeR ................................ ................................ ................................ .......................... 27
y tniil iabi x"sen tle fnFheoe Wlm:"be1alTE y gneo tiGatHrcGtuSdeR ............................... 4
iii
THE ECONOMICS OF "WHEN" FLEXIBILITY IN THE DESIGN OF
GREENHOUSE GAS ABATEMENT POLICIES
leahciM .A ,namoT drahciR .D ,nretsnegroM dna nhoJnosrednA *
1. INTRODUCTION
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pyeu ls -ylr edlaeoh llnvttwiaoeou uirlbdtt snna da ensl dvreu oe eeioettttchbpanisohildwoap
e ssue osfha.o ngenerieer hgephstomta
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nointon ek vrlnoo ow c r Cesooo7efmn ttt9b oaod eoo9merie2hry1ehFtt9tPKctai9eNn1DU
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tsssete oi s ifmm . urr o (og)tmetee,nncsmnhslo ioaruteocod lEoohc etrBfctoeothcotcrAP
s wt l0on tg e9l eeunnv 9eecvoi ies1bcribtge lnuefasahs odprrtloi eieetsrfvvsaeilme
.210 2 - "8r, 0o de 0F.toh t2Setite nn.gnrhso eUr eetiinmaocptett trcviaeuempdsmeorc"
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percent.
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.se iec t itadlnmeoeirp rleye cdb fsnsfnea irg e d enessote vnttt siosa eutpopfhoascotilererarv
2. AN OVERVIEW OF ECONOMIC ARGUMENTS FOR POLICY FLEXIBILITY
l aey tece sn rigeeenglnt s m oaoaafycaophmolidwciam ntlnotucansfoocMe
ser i eu. gq seneenta rr oa hm ufimc rttotieesa a lhtrnsrtc T-iieaegfdhhnittoslnoc sequential
3
nosredn Adn a,nretsnegro M,namoT VER-83 -F9F9R
decisionmakingsei c snid tolnsei o aagst pori aetac.hctewndo - tseetae nko-onOanldamla
y c n sn.ateedla tgeph,na nttda lddain ace uleteenemut nmtobroaesoesohdbaclnfsppIumi
n.oeilt b asawm i le rsgin oena yftd ivolnnumkattiulra nno cetwiecAnterci-ieagvhnnoil
gn i s deeg.rh vnlatsiiogntmre oaitrfintnosrosecitmlea
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.yt iec va dip get aenrpxc hiiaisTnsdm neeaofto hdionintlet ig ompnnef toiehtdsrtrnetoavspni
yeag mnr aen, hvoetcoimut io astbsemnaahrot.oi dftsenpitioadpu
,ht htrec iawaywto c sro fa re pteou teet gpohqdshvaenaytenotobhiKdacetzady lnaIna
s estns ecouteseioah al thhtfgfeant oesreetriteh amnr tmhee gyrtrctle pnieteot- hcagstmniiotllu
.s nm eoum s iireussdetoas eta hgi ,mrfnmt e -oeeaegt oee tnottrrfaans -ghomhuetticjhrltochs 3
nlo aindotaeg acuenzsbi irrlu e ipa cb.bfimsao ruy tnena, s e-hwtyvgpsn insrangooiAlmFta
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de h , c ler. manahalth e o aotlaacotcrecgu ohatsipbcgteympi rso atnnsrIo'acd pelerhotw
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l a etyv nli h e btlgomsaaaitnt il thosg feen ronsirhef icitttmoemvtesehenegurteeerjcsmanntui
benefits. 4 . sm ea fure osghcsatiiitda m ese htl ecn palsem bsi1aesTrp
Table 1: Elements of "When" Flexibility in a GHG Reduction Strategy
stim inloissi mfyeotilibixelF
,sucof mret-trohS
,sucof mret-trohS
rof emarfemiT -tsoc ssel( stimil elbixelfni
stim iellbixelf
sla olgatnemnorivne )evitceffe
,sucof mret-gnoL
,sucof mret-gnoL
er osmt(i meillbixelf
stimil elbixelfni
)evitceffe-tsoc
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3
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4
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4
nosredn Adn a,nretsnegro M,namoT VER-83 -F9F9R
period of time. 5 dsleueiobrc tdneuzoiclair tn s ieushhdettnhiicw a .oerlpbp iaexreolMf
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se t ns ns Oet eeflinf mdoota ote icitoe iloevonrthsethotuotio trotpyeprrmKhPoitppo
s nenokoiait tscsr s useti,deda mseelncentr duioatrh itsapfetsogaoha-certcn-rgootolisetagaenl
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. ssyr tteenifhe lftmioe be ,eirsderxgAeveeatohlobwfna potentialgn iyrlelwaoil tn artosfbus
se nceooaktilatptc u nd.o e litreos s hrs gfot tiGno c,nm Hi t eoeeGwe Aymcmohtbialtotslna
loc o ,te)ohyrttPili bti axn t eettd nalhss e ynenifwoetvneemio(cwae ahhipoiectwtlhbca
gmsnr ltienae v toognea -igriings a hin srts c-ogietna dlnmhsaeseiegohrkssictosauhmiharpc
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5
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6
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5
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3. TARGETS AND TIMETABLES: TWO CASES OF ENVIRONMENTAL
DIPLOMACY
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6
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7
.)19 9 .1etl(teatesir r eoeMS
8
ta hgtninr atwnemsses stafa rdadehsilb uypcne gnAoitceto rlPatnemnoriv n .E .SeU h6t8 9r1ebmev o nNI
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ndietou qd(i atsnemsses sea h,tlev etlnerr uecht New York Times, . )e1g a,p6 8 .95v1oN
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