Decoupling: Policy Implications

The conclusions and policy implications presented in this report build on i) the estimates of relative price effects of different kinds of stylised policy measures, first developed using the Policy Evaluation Model PEMl1 (OECD, 2001b), ii) a conceptual framework on decoupling (OECD, 2002a) which drew attention to the potential for risk-related and dynamic effects which theory suggests are likely to occur in addition to the relative price effects, and iii) a series of studies aimed at explaining, analysing and, where possible,quantifying some of the potentially important static, risk and dynamic effects and their implication on the degree of decoupling of different measures. Annexes 1 and 2 give some details of the issues investigated in each of the background studies.