A carbon horse race: Abatement subsidies vs. permit trading in Switzerland

Hintermann, Beat and Žarković, Maja. (2021) A carbon horse race: Abatement subsidies vs. permit trading in Switzerland. Climate Policy, 21 (3). pp. 290-306.

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Official URL: https://edoc.unibas.ch/84590/

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Swiss climate policy consists of three regulatory instruments for greenhouse gas emissions reduction: A CO2 levy, the Swiss Emissions Trading System (CH EHS) and an additional program for medium-sized plants that is labeled ``nonEHS'' and consists of command-and-control elements plus a sizeable abatement subsidy. Our paper informs about this tripartite climate policy, which is unique in the international context. Second, we estimate the differential impact of the CH EHS and the nonEHS program on plants' emissions. Our empirical strategy exploits a policy change in 2013 that instituted a mandatory emissions trading system for a subset of previously regulated plants. We find that the nonEHS outperforms the CH EHS for a minority of plants, but that on average, the two programs result in similar abatement efforts despite very different financial incentives. Plants that previously engaged in abatement efforts continue to do so even after the financial incentives were reduced by an order of magnitude.
Faculties and Departments:06 Faculty of Business and Economics > Departement Wirtschaftswissenschaften > Professuren Wirtschaftswissenschaften > Public Economics / Public Finance (Hintermann)
UniBasel Contributors:Hintermann, Beat and Žarkovic, Maja
Item Type:Article, refereed
Article Subtype:Research Article
Publisher:Taylor & Francis
Note:Publication type according to Uni Basel Research Database: Journal article
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edoc DOI:
Last Modified:21 Dec 2021 02:30
Deposited On:08 Oct 2021 08:19

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