Abstract

Higher energy prices and the growing concern about global warming have led to a number of policy goals and targets designed to curb global warming and/or the development of alternative sources of energy. However, the Tinbergen Rule states that for each and every policy target there must be at least one policy tool. If there are fewer tools than targets, then some policy goals will not be achieved. Further complicating the public policy environment are the facts that some policy tools affect more than one target, some tools help achieve more than one target, and others, while meeting one target, make meeting other targets more difficult. Also, some targets are more efficient than others. If policy makers are going to be able to effectively meet their environmental and energy goals, a series of policy tools need to be developed.