This paper addresses the issue of environmental policy instrument choice for achieving deep
emissions reductions in the industrial sector. In the environmental economics literature a lot
of attention has been paid to the efficiency aspects of different types of policy instruments,
e.g., market-based policy instruments such as taxes and tradable emission allowances as well
as policies that rely on either performance or technology standards (Copper and Oates, 1992).
This research strand emphasizes analyzing the value of the expected environmental benefits
and the costs at which any improvements in environmental quality can be achieved, and it
also highlights the innovation-promoting impacts of different policies (e.g., Requate, 2005).