Climate Change Policy
Dramatically reducing greenhouse gas emissions from the energy sector is likely to be expensive, but sound public policy can ensure that any investments in this area yield the greatest possible benefit for the climate. PESD uses economic modelling and the Energy Market Game to examine the efficiency of different climate policies in reducing emissions, with real-world politics taken into account. We consider the relative performance of carbon taxes and cap-and-trade systems under uncertainty (for example, uncertainty in economic growth as well as uncertainty in renewables growth and output). We also study the effect of overlapping climate policies (for example, a renewable portfolio standard and a carbon price operating at the same time) on economic and environmental outcomes.