Design of Environmental Policy Instruments

Policy design is at the heart of environmental economics and is my favourite part. First because this is where we can make a difference: We actually try to fix things and make them better. Secondly it is an interesting intellectual exercise: We have to realize that governments do not just decide our emissions, they just set rules and the rules we need will be different depending on whether consumers and producers are rational or addicted, forward-looking or myopic, selfish or altruistic, whether they have the power to be strategic and many other conditions. Policies to stop smoke will have to be quite different for power plants, forest fires or teenage smokers…!

Here is a selection of papers on policy design:


  • Thomas Sterner, Edward B. Barbier, Ian Bateman, Inge van den Bijgaart, Anne-Sophie Crépin, Ottmar Edenhofer, Carolyn Fischer, Wolfgang Habla, John Hassler, Olof Johansson-Stenman, Andreas Lange, Stephen Polasky, Johan Rockström, Henrik G. Smith, Will Steffen, Gernot Wagner, James E. Wilen, Francisco Alpízar, Christian Azar, Donna Carless, Carlos Chávez, Jessica Coria, Gustav Engström, Sverker C. Jagers, Gunnar Köhlin, Åsa Löfgren, Håkan Pleijel, Amanda Robinson. (2019). Policy design for the Anthropocene, Nature Sustainability.
  • Meckling, J., Sterner, T., & Wagner, G. (2017). Policy sequencing toward decarbonizationNature Energy2(12), 918.
  • Bonilla, J., J. Coria and T. Sterner. 2017. “Technical Synergies and Trade-Offs Between Abatement of Global and Local Air Pollution”. Environmental and Resource Economics (2017): 1-31.
  • Jensen S., K Mohlin, K Pittel and T Sterner. 2015. The green paradox: a brief introduction to Climate policy and intertemporal emissions leakage. Review of Environmental Economics and Policy, 9(2): 246-265 DOI: 10.1093/reep/rev010
  • Bonilla, J., J. Coria, K. Mohlin and T. Sterner. 2015. Refunded Emission Payments and Diffusion of NOx Abatement Technologies in Sweden. Ecological Economics, Vol 116, (August): 132-145.
  • Sterner, T. and A. Müller (2008) ‘Output and Abatement Effects of Allocation Readjustment in Permit Trade’, Climatic Change vol. 86 pp 33-49.
  • Bluffstone, R and T Sterner (2006) ”Explaining Environmental Management in Central and Eastern Europe”, Comparative Economic Studies, Vol. 48, No. 4. pp. 619-640.
  • Sterner, T. and L. H. Isaksson (2006) ‘Refunded emission payments theory, distribution of costs, and Swedish experience of NOx abatement’, Ecological Economics, Vol. 57, No. 1, pp 93-106.
  • Kathuria, V. and T. Sterner, (2006) ‘Monitoring and Enforcement: Is Two-Tier Regulation Robust?’ Ecological Economics, Vol. 57(3) pp. 477-93.  
  • Fredriksson, P. G. and T. Sterner (2005) ‘The Political Economy of Refunded Emission Payments’, Economic Letters, Vol. 87, No.1, pp 113-119.
  • Hammar, H., Å. Löfgren and T. Sterner, (2004) ‘Political Economy Obstacles to Fuel Taxation’, Energy Journal, ISSN0195-6574, Vol. 25(3) pp 1-17.
  • Torén, K. J. and T. Sterner (2003) ‘How to Promote Prevention – Economics Incentives, Legal Regulations or Both?’, Scandinavian Journal of Work, Environment and Health, Vol. 29(3) pp 239-245.
  • G. Köhlin and T. Sterner (2003) Environmental Taxes in Europe, Public Finance and Management, 3(1), pp 117-42, ISSN Number 1523-9721,
  • T. Sterner and V. Kathuria (2002) Monitoring and Enforcement: Is Two-Tier Regulation Robust?, Ecological Economics,
  • Holmåker, K. and T. Sterner (1999) ‘Growth or Environmental Concern: Which Comes First? Optimal Control with Pure Stock Pollutants’, Environmental Economics and Policy Studies, Vol. 2, Nr 3, pp 167-185.