Economics of policy options to address climate change by Gregory N. Bartos

By Gregory N. Bartos

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GAO provided a summary of the findings of this book and briefed representatives from the CEA, the Council on Environmental Quality (CEQ), EPA, and DOE on the results of the panel prior to issuing this book. The views expressed by the panel members do not necessarily represent the views of GAO. APPENDIX II: SELECTED CHARACTERISTICS OF PANELISTS’ PREFERRED POLICY OPTIONS FOR ADDRESSING CLIMATE CHANGE Listed below are selected panelist policy recommendations for implementing a market-based mechanism to place a price on greenhouse gas emissions.

On average, the panelists rated cost effectiveness and political feasibility as the most important criteria (see fig. 6 and app. III for more detail). THE MOST IMPORTANT TRADE-OFFS ARE BETWEEN THE RELATIVE EFFECTIVENESS OF CAP-AND-TRADE SYSTEMS AND THE RELATIVE EFFICIENCY OF TAXES When asked to identify their preferred policy options, 8 of the 18 panelists said that they prefer a cap and trade with a safety valve as a way to combine some elements of both a cap-and-trade system and a tax. Some panelists noted that a traditional cap-and-trade system would provide more environmental certainty; that is, it would more likely achieve specific emissions reductions because the policy caps the total amount of emissions at a specific level.

Bartos options, we asked panelists to discuss research and development of technologies, adaptation to climate change, revising efficiency standards, and reforming subsidies. For example, several panelists noted that mechanisms such as vehicle fuel efficiency standards would be unnecessary if the Congress enacted a mitigation policy to place a price on carbon. Two panelists noted that setting efficiency standards for vehicles was unlikely to yield cost-effective reductions in emissions because greater fuel efficiency lowers the cost of driving, potentially leading individuals to drive more.

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