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The UK Climate Change Levy Agreements: Combining Negotiated Agreements with Tax and Emission Trading

February 2004

Article written with Matthieu Glachant and published in "Voluntary Approaches to Climate Protection. An economic assessment of private-public partnership" edited by Andrea Baranzini & Philippe Thalmann, Edward Elgar, 2004.

The paper describes the recent implementation of the UK Climate Change Levy Agreements and discusses their environmental effectiveness and cost efficiency. They are negotiated agreements covering the energy-intensive sectors, which are combined with a tax and an emission trading programme. We show how the combination with the tax leads to a better environmental effectiveness and how the combination with emission trading improves the cost efficiency. Nevertheless we conclude that the performances of the policy mix would not be affected by the absence of NAs.

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