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Policy Instruments

This web section collects a selection of resources that are relevant within the field of environmental policy instruments. It is aimed at a wide group of users, including researchers, students and policy makers. Please find a selection of relevant publications, useful links, databases and other resources in the menu to your right.

Research Group

We are a group of researchers at the EEU and within the EfD whose main focus when it comes to research, teaching and consulting or policy advice is on the actual design of policy instruments. If you want to get in touch with us please find our contact details here.

The design of policy instruments

The design of policy instruments is the final and most crucial step in environmental economics. We, the research group, study not only the efficiency of various instruments but also their income distribution effects and their political feasibility.

As researchers we first analyze and value the complexities of the ecological and environmental effects.Then we penetrate the economics and the politics: the incentive, distributional, feasibility and information aspects related to a given socioeconomic context. This leads us to suggestions of actual actions by firms and consumers such as energy savings, fuel switching, research into or adoption of new technologies. These actions are however just illustrations of potential actions.

We must understand that the policy maker does not actually build factories or decide how a family gets from their home to their workplace. The design of policy instruments is the design of what policy makers can actually do to make sure that other agents in the economy mitigate climate damage.

If the problem is caused by the non-existence of property rights to the atmosphere then the policy maker maybe needs to provide such property rights. Alternatively the policy maker might provide some other mechanism such as a tax or a fee through which a scarcity rent is created. Note that many different instruments are possible, including treaties, labeling, certificates, and subsidized research.