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Economic instruments and clean coal techologies

AUTHOR: John Kessels
DATE: January 2008

This report analyses the effectiveness of emissions trading and other economic instruments in promoting globally the use of clean coal technologies. An important criterion in the evaluation of emissions trading is the effectiveness of this tool in stimulating the technological change necessary to enable the long-term shift towards carbon capture and storage.

The impact of the European Union Emission Trading System first trading period 2005-07 in this area is examined. In particular, how successful it has been in establishing a framework for the long term uptake of clean coal technology deployment. Other options considered in the report include voluntary agreements, a carbon tax and fiscal incentives as alternatives to encourage clean coal technologies.