8ee1e895_r_Climate_and_Energy_Solutions__Compliance_Cost_Certainty
[Policy] Performance Standard (rate based, non-tradable) [Innovation] Limited - once the standard can be met, there is little incentive to continue to improve performance beyond reducing costs. (Possible through frequent revision of the policy requirements.) [Environmental Certainty] Some - a performance standard will require that each unit have a certain emissions profile but total emissions will depend on overall use characteristics. [Linkability] Difficult to link beyond a specific sector [Expansion] Some - policymakers can create standards specific for each sector to expand their reach. [Revenue Recycling] No [Compliance Cost Certainty] 
No - difficult for policymakers to understand cost structures that will lead to compliance.
Market Mechanisms: Understanding the Options | Center for Climate and Energy Solutions