Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain

The document evaluates different strategies for distributing emission reduction burdens between ETS and non-ETS sectors in Spain, alongside the impact of replacing a CO2 tax with taxes on energy, oil, or electricity. It concludes that a cost-effective distribution—where energy-intensive sectors bear a larger share of the effort—minimizes overall mitigation costs, while taxing electricity is found to be highly inefficient for reducing CO2 emissions.

• A combination of market instruments is necessary for cost-effective emission reductions, but the specific design is critical to avoid excessively high costs.
• Under a cost-effective distribution (CED) for a 20% mitigation target, ETS sectors should handle 68% of the total effort, while non-ETS sectors handle 32%, because mitigation is cheaper in energy-intensive sectors.
• While egalitarian distribution and proportional-emission distribution result in costs close to the minimum, distribution based on proportional output leads to a significant increase in costs.
• Replacing a CO2 tax with taxes on energy or oil increases costs, although the impact is not vastly different from a CO2 tax; however, using a tax on electricity to reduce CO2 emissions is described as tremendously inefficient.

APA

M.C., G., M., G.-E., & I., G. (2011). Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201104281038511204923550.pdf

Chicago

M.C., Gallastegui,, González-Eguino, M., and Galarraga, I. Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain. Basque Centre for Climate Change, 2011. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201104281038511204923550.pdf.

Wikipedia

{{cite report |last1=M.C. |first1=Gallastegui, |last2=M. |first2=González-Eguino, |last3=I. |first3=Galarraga, |title=Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain |publisher=Basque Centre for Climate Change |date=April 2011 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201104281038511204923550.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mc2011cost, author = {M.C., Gallastegui, and M., González-Eguino, and I., Galarraga,}, title = {{Cost effectiveness of a combination of instruments for global warming: a quantitative approach for Spain}}, institution = {Basque Centre for Climate Change}, year = {2011}, month = apr, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/201104281038511204923550.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }