Assessment report on NRP subtheme "national instruments for climate change policy"

Economic instruments for environmental protection feature in textbooks for their superior performance in terms of effectiveness and both static and dynamic efficiency, especially in cases characterized by a large number of polluters with large differences in abatement cost. These instruments are thus pre-eminently suited to be included in climate change policies. However, this proves to be very difficult as yet. The projects under this research sub-theme share a common interest in the complexities of implementing various types of economic instruments. The first project deals with the design of a European system of tradable emission rights. The second project is on the feasibility of ecological tax reform, with special reference to The Netherlands. The Climate Fund project, the third project, aims at investigating whether an international fund for side payments is an effective and efficient tool to reduce CO 2 emissions. To that purpose, the world is divided into 9 regions. Finally, the fourth project uses an applied general equilibrium model to analyze the effectiveness and especially the income distributional effects of differently designed CO 2 charges. The projects yield interesting results from which policymakers can benefit. There still are, however, blind spots. These and further research questions are identified