Twentieth International Conference on Environmental, Cultural, Economic & Social Sustainability

Abstract

Several studies have already accounted for interactions between instruments of climate policy and their negative, positive or neutral synergistic effects on overall emissions reduction. Nevertheless, there is little evidence that delves into the specific strategic implications of such interactions and resulting synergies, when it comes to addressing pollutant emissions. We then develop simple, yet useful games to investigate, from a Shapley Value perspective, how a group of synergistic environmental policies can collectively achieve greater emissions reductions. The players in the games represent three different environmental policies, namely emission trading scheme, innovation support policy and labelling information provision policy. Moreover, reduction targets and synergy factors are considered in such games to explore collective effectiveness and marginal contributions of policies. The initial results unsurprisingly show that the emission trading scheme policy, which entails the most significant emissions reduction target, delivers the greater marginal contribution. However, the innovation support policy, which entails the more reasonable emissions reduction target, outperforms the other policies in terms of marginal contribution, when it largely meets the expected target, even when the remaining policies exhibit a similar performance. Furthermore, for specific (estimated) levels of synergy, the labelling information provision policy delivers the lowest marginal contribution. These findings provide opportunities for assessing the pertinence and relevance of implementing particular policies in conjunction with others, and encourage further research concerning strategic implications of joint implementation and interactions of environmental policies.