A framework on interactions of climate and energy policy instruments

TLDR: In this paper, the authors analyze the concept of interactions between policy instruments addressing environmental, energy and climate change issues and construct a qualitative method that can assist policymakers in selecting an optimal policy mix.

Abstract: In this paper we analyze the concept of interactions between policy instruments addressing environmental, energy and climate change issues. Although discussion on such policies has been taking place for almost two decades, their interactions are not so sufficiently explored. Initially, we refer to literature on various types of interactions and we classify them. Furthermore, we construct a qualitative method that can assist policymakers in selecting an optimal policy mix. This method breaks down into numerous components, the areas where different policies interact, and facilitates the unveiling of potential overlaps and complementarities. These areas consist of categories as measure identification, objectives, scope, market arrangements, market flexibility, financing, technological parameters, timing, compliance parameters and institutional setup. In addition, it renders the possibility of combining different options and design elements of policies. Furthermore, a list of various criteria serves as an assessment tool for interactions, where a weighing factor and uncertainty parameters have been added, in order to produce an aggregate indicator of the ex-ante analysis of the policy mix selected. Through this method, we present a complete framework of discernment of diverse forms of environmental policy instruments.