Grischa Perino

• Dr.
• Professor at Hamburg University

We study the impact of the market stability reserve (MSR) on price and emission paths of the EU ETS. From 2019 onwards, the MSR will adjust the number of allowances auctioned as a function of the size of the surplus, i.e. in times of a large surplus it shifts the issue date of allowances into the future. In a perfectly competitive allowance market...

Governments and environmental NGOs campaign for carbon footprint reductions by households. Many of the behavioral changes recommended reduce demand for goods produced by sectors covered by cap-and-trade schemes. With a binding cap, greenhouse gas emissions from those sectors do not change. I show that climate campaigns create leakage effects if cov...

We show that for a broad class of technologies the relationship between policy stringency and the rate of technology adoption is inverted U-shaped. This happens when the marginal abatement cost (MAC) curves of conventional and new technologies intersect, which invariably occurs when emissions are proportional to output and technological progress re...

Landscapes generate a wide range of valuable ecosystem services, yet land-use decisions often ignore the value of these services. Using the example of the United Kingdom, we show the significance of land-use change not only for agricultural production but also for emissions and sequestration of greenhouse gases, open-access recreational visits, urb...

Using a discrete choice experiment, we elicit valuations of engagement with ‘everyday wildlife’ through feeding garden birds. We find that bird-feeding is primarily but not exclusively motivated by the direct consumption value of interaction with wildlife. The implicit valuations given to different species suggest that people prefer birds that have...

Countries around the world are enacting climate policies such as coal phase-outs, aviation taxes, and renewable energy support. These policies often overlap with a wider multi-jurisdictional carbon-pricing system like the EU’s Emissions Trading System. We develop a general framework to study how effectively such “overlapping climate policies” can...

Individual voluntary climate action could contribute to closing the gap between global emission targets and the instruments in place. However, complex regulatory frameworks make it difficult for individuals to understand which actions align with their goals. Expert advice might provide guidance, but it is not trivial how detailed the advice should...

Climate protests are an important driver for ambitious climate policies. However, it is still unknown how individual protest participation decisions depend on each other. Exploiting the unique opportunity of the Third Global Climate Strike, we conducted multi-wave population surveys with 1,510 people in the four largest German cities. With a random...

Having experienced low prices for about a decade, the European Union Emissions Trading System has been supplemented with the market stability reserve (MSR) that adjusts the supply of allowances to market outcomes. We critically review the literature assessing the performance of the MSR against several policy objectives. In doing so, we cover both c...

A tax on meat could help address the climate impact and animal welfare issues associated with the production of meat. Through a referendum choice experiment with more than 2,800 German citizens, we elicited support for a tax on meat by varying the following tax attributes: level and differentiation thereof, justification and salience of behavioural...

The European Union and Germany have recently committed themselves to greenhouse-gas neutrality by 2050 and 2045, respectively. This substantially reduces their gaps in ambition to the Paris climate goals. However, the current climate policy mix is not sufficient to reach these targets: There is a major implementation gap. Based on economic, legal,...

We report evidence from a field experiment (N=561) on how different reasons for reducing the consumption of red meat (health, climate and animal welfare) impact intentions to change behavior, the consumption of red meat and the enjoyment of meals. Surprisingly, the three concepts are not aligned. On average, two treatments affect intentions to redu...

An increasing number of people are concerned about eating meat, despite enjoying doing so. In the present research, we examined whether the desire to resolve this ambivalence about eating meat leads to a reduction in meat consumption. Our model of ambivalence-motivated meat reduction proposes that the pervasive nature of evaluative conflict motivat...

In this article, we explain why the current climate policy mix of the European Union (EU), consisting of the EU Emissions Trading System (ETS) and overlapping policies, is incoherent with respect to emission abatement and cost-effectiveness. The concept of policy coherence guides our analysis in identifying the EU ETS’ current dynamic supply adjust...

We test the hypothesis that protest participation decisions in an adult population of potential climate protesters are interdependent. Subjects (n=1,510) from the four largest German cities were recruited two weeks before protest date. We measured participation (ex post) and beliefs about the other subjects' participation (ex ante) in an online sur...

We test the hypothesis that protest participation decisions in an adult population of potential climate protesters are interdependent. Subjects (n=1,510) from the four largest German cities were recruited two weeks before protest date. We measured participation (ex post) and beliefs about the other subjects' participation (ex ante) in an online sur...

How decision makers respond to behavioral and traditional interventions might depend on their and the regulator's attributes. This online experiment investigates the effect of defaults, recommendations, and mandatory minimum contributions accompanied by regulator information on the private provision of climate protection, accounting for intrinsic m...

This paper presents a two-wave survey experiment on self-image concerns in voting. We elicit votes on the so-called Horncow Initiative which required subsidization of farmers who refrain from dehorning. We investigate how messages that change the self-signaling value of a Yes vote affect selection and processing of information, and reported voting...

Major carbon-pricing systems in Europe and North America involve multiple jurisdictions (countries or states). Individual jurisdictions often pursue additional initiatives---such as unilateral carbon price floors, legislation to phase out coal, aviation taxes or support programs for renewable energy---that overlap with the wider carbon-pricing syst...

An increasing number of people is concerned about the ethics of eating meat despite enjoying doing so. In the present research, we examined whether the desire to resolve this ambivalence about eating meat leads to a reduction in meat consumption. Our model of ambivalence-motivated meat reduction proposes that the pervasive nature of evaluative conf...

Major climate-cum-energy policies and respective impact projections rest on the widespread belief that increased energy efficiency can be equated with savings in energy use and emissions. This belief is flawed. Due to the rebound effect emissions savings from energy efficiency improvements will be generally less than what is technically feasible, o...

Postponing the issue date of allowances in a cap-and-trade scheme, by e.g. a reserve mechanism, impacts the time profile of low-carbon investments. If the postponement constrains intertemporal arbitrage, short-term investments increase but long-term investments are deterred. This effect aggravates the shortage of long-term investments at least part...

Am 20. September hat die Bundesregierung die Einführung eines nationalen CO2-Preises beschlossen. Sie hat sich dabei für eine Preisregulierung entschieden, die ab dem Jahr 2026 weitgehend durch eine Mengenregulierung ersetzt wird. Der vorliegende Artikel schlägt vor, Preis- und Mengenziel von Anfang an zu kombinieren und so Planungssicherheit zu sc...

Frequently, scholars and decision-makers criticize behavioral public policies for infringing on behavioral autonomy. This paper provides evidence from an online framed field experiment, in which participants encountered a recommendation, a default value, or a mandatory minimum contribution accompanied by varying information on the regulator, before...

We present an integrated framework to understand the emissions impact of unilateral overlapping policies within a carbon-pricing system. "Internal carbon leakage" captures emissions displacement within the system (e.g., due to greater product imports from a neighbouring country). The waterbed effect captures the policy's interaction with the system...

In the version of this Comment originally published, the scenario in which the market stability reserve (MSR) takes in allowances for seven years was calculated using incorrect x and y values in the formula described in the caption of Fig. 2; the red bars in Fig. 2 have now been updated. In the sentence “each subsequent year the number of allowance...

This paper investigates differences between a default, a recommendation, and a mandatory minimum contribution on private provision of a large scale public good (climate protection). Information on the regulator, its interaction with the intervention type, and with pre-intervention intrinsic motivation on voluntary contributions is analyzed. Data ar...

The new rules of the EU ETS will fundamentally change its character. The long-term cap on emissions will become a function of past and future market outcomes, temporarily puncturing the waterbed and having retroactive impacts on GHG abatement from overlapping policies.

The final design choices for Phase IV (2021–2030) of the European Union Emissions Trading System (EU ETS) are about to be made. The European Commission, the European Parliament and the Council of the European Union have all issued proposals for the rules governing Phase IV of the EU ETS. This article uses an analytically tractable simulation model...

The light bulb ban introduced by the EU is used as an example to illustrate how to assess the climate impact of a policy that overlaps with a cap-and-trade scheme. The European Commission estimates that by 2020 the reduction in GHG emissions induced by banning incandescent light bulbs will reach 15 million tons annually. The number is a conservativ...

The student-led project organizing the event Dies Oecologicus, which aims for a whole institutional change by initiating a bottom-up sustainable development process, is described. Driven by the need for a more prominent role of sustainability in the university’s curriculum, the daily lives of its members, and the governance and administration of th...

WiSo-HH Working Paper Series, No. 28, August 2015. Abstract: We study the impact on price and emission paths of the allowance preserving market stability reserve (MSR) to be introduced to the EU ETS in 2019 in a dynamic optimization framework. The MSR adjusts the number of allowances auctioned as a function of the size of the aggregate bank in the...

The success of global climate policies over the coming decades depends on the diffusion of 'green' technologies. This requires that international environmental agreements (IEAs) and trade-related intellectual property rights (TRIPs) interact productively. Using a simple and tractable model, we highlight the strategic reduction in abatement commitme...

Climate policies overlapping a cap-and-trade scheme are generally considered not to change domestic emissions. In a two-sector general equilibrium model where only one sector is covered by a cap, we find that such policies do have a net impact on carbon emissions through inter-industry leakage. Promotion of renewable energy reduces emissions if tax...

A meta-analysis of studies valuing urban greenspace in the UK is undertaken to yield spatially sensitive marginal value functions. A geographical information system (GIS) is used to apply these functions to spatial data detailing the location of such greenspace resources in five British cities. Changes in monetary values are computed for the six fu...

C. Obst et al. provide a welcome opportunity to clarify the difference between environmental-economic cost-benefit analyses (such as ours) and environmental accounting exercises [such as the UN-SEEA ([ 1 ][1], [ 2 ][2]) initiative]. Accounting studies attempt to assess the total value of goods

We present evidence of crowding out of intrinsic motivation in real purchasing decisions from a field experiment in a large supermarket chain. We compare three instruments, a label, a subsidy, and a neutral price change, in their ability to induce consumers to switch from dirty to clean products. Interestingly, a subsidy framed as an intervention i...

We combine natural science modelling and valuation techniques to present economic analyses of a variety of land use change scenarios generated for the UK National Ecosystem Assessment. Specifically, the agricultural, greenhouse gas, recreational and urban greenspace impacts of the envisioned land use changes are valued. Particular attention is give...

Location is a crucial driver of both the marginal abatement and damage costs of sulfur dioxide emissions by U.S. coal-fired power plants. Before the start of the Acid Rain Program in 1995, old boilers were subject to emission rate standards set by individual states. We investigate how individual states adjusted their sulfur regulation laws in respo...

The increase in the level of greenhouse gas (GHG) emissions in the atmosphere in the last centuries, and the subsequent increase in temperature, has been a widely studied area in the last few decades. Climate change has become a key item on the political agenda due to concerns regarding the sustainability of current human consumption for future gen...

We present the first evidence of motivation crowding in real purchasing decisions from a field experiment in a large supermarket chain. We compare three instruments aiming to induce climate friendly choices: labels, subsidies, and product bans and neutrally framed versions of the latter two. Labels and bans activate intrinsic motivation of consumer...

Linda Davies, Lester Kwiatkowski, Kevin J. Gaston, Helen Beck, Hope Brett, Michael Batty, Lian Scholes, Rebecca Wade, William R. Sheate, Jon Sadler, Grischa Perino, Barnaby Andrews, Andreas Kontoleon, Ian Bateman and Jim A. Harris

We present evidence from a field experiment where consumers make real purchasing decisions within the simulated online shopping environment of a large supermarket chain. The experiment provides a test of the impacts of different types of regulatory interventions (price vs. quantity) in inducing environmentally friendly purchasing decisions. We comp...

This paper compares taxes and tradable permits when used to regulate a competitive and polluting downstream industry that can purchase an abatement technology from a monopolistic upstream industry. Second-best policies are derived for the full range of the abatement technology’s emission intensities and marginal abatement costs. The second-best per...

Evidence from the market for flue-gas desulfurization devices [scrubbers] in the U.S. is used to show that the choice and stringency of environmental regulation have substantial effects on the mark-up of an abatement technology. The imperfectly competitive upstream eco-industry charges higher prices for scrubbers to power plants participating in Ph...

McCallum (1995, American Economic Review Papers and Proceedings 85 (2), 207-211) conjectures that delegation merely relocates the commitment problem but does not solve it. This holds if optimal ex-ante policies do not change if additional information becomes available. However, with a flexibility-credibility trade-off delegation improves credibilit...

In areas such as climate change, the recent economic literature has been emphasizing and addressing the pervasive presence of uncertainty. This paper considers a new and salient form of uncertainty, namely uncertainty regarding the environmental characteristics of ‘green’ innovations. Here, R&D may generate both backstop technologies and technologi...

Are prices or quantities the best regulatory instrument to align private actions with public interests in the presence of externalities? We add another dimension to this ongoing debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-o_ betwee...

Most real world emission permit schemes are in effect hybrid instruments that feature both quantity and price controls. While the effects of price bounds are well understood for issues such as uncertain abatement costs it has not been investigated how such bounds affect time-consistency of environmental regulation and research incentives. The prese...

The European Directive on Waste Electric and Electronic Equipment 2002/96/EC distorts incentives in regulated markets. Treatment of ‘historical waste’—i.e. products sold prior to 13 August 2005—is financed by all firms in the market at the time of disposal. This stimulates excessive pre-regulation output by incumbents for two reasons: a costs shari...

The performance of market based environmental regulation is affected by patents and vice versa. This interaction is studied for a new type of innovation where new technologies reduce emissions of a specific pollutant but at the same time cause a new type of damage. A robust finding is that the efficiency of permits is affected by monopoly pricing o...

We study the optimal R&D trajectory in a setting where new technologies are never perfect backstops in the sense that there is no perfectly clean technology that eventually solves the pollution problem once and for all. New technologies have strings attached, i.e. each emits a specific stock pollutant. Damages are convex in individual pollution sto...

The present thesis extends the economic literature by introducing green horizontal innovation. Green horizontal innovation is characterized by new technologies that solve an existing pollution problem but give rise to a new one at the same time. A prominent example are CFCs that once replaced poisonous refrigants but are now phased-out themselves....

The design of environmental regulation affects research incentives created by patents. The previous literature concentrates on stringen-cies, treating the instrument of regulation as exogenous. The present paper extents the choice set of the government and allows for an en-dogenous choice of both the instrument and its design. This flexible mechani...

Post-innovation policy adjustment affects the innovation incentives created by environmental regulation. A standard result is that if the government does not commit on certain stringencies but on the instru-ment type, taxes and permits are fully equivalent. This paper considers a highly relevant class of innovation -where the new technology emits a...

This paper presents the first formal treatment of induced horizontal environmental innovation. Horizontal environmental innovation is characterised by new technologies that produce substitutes to established 'dirty' goods but emit new types of pollution. It is shown that there are social gains of horizontal technology differentiation in a competiti...

Many countries are using a mix of two policy instruments to induce consumers to re- duce their energy use: On the one hand, they rely on moral suasion in order to seed and nourish 'green' motives. On the other, there is the use of regulatory instruments such as energy taxes and command-and-control to aect behavior using external incentives. While c...

In order to investigate how exposure to and interaction with everyday wildlife is valued, we conduct a discrete choice modelling study on garden birds in Norwich, UK. Our results indicate that wildlife living at people's doorsteps substantially contributes to welfare and potentially more so than protection of endangered species in more remote locat...