Extending the Sectoral Coverage of an International Emission Trading Scheme

In a model inspired by the EU Emissions Trading Scheme, non-cooperative countries allocate their emissions to internationally trading and non-trading sectors. Each country is better off with trading than without, and aggregate welfare is maximized with all sectors in the trading scheme. We analyze t...

Full description

Saved in:
Bibliographic Details
Published in:Environmental & resource economics 2011-10, Vol.50 (2), p.243-266
Main Authors: Dijkstra, Bouwe R., Manderson, Edward, Lee, Tae-Yeoun
Format: Article
Language:English
Subjects:
Asymmetry
Carbon emissions
Community development
Cost analysis
Costs
Economic Policy
Economics
Economics and Finance
Emissions trading
Environmental Economics
Environmental Law/Policy/Ecojustice
Environmental Management
Environmental policy
EU emission trading scheme
H23
International emission trading
International trade
Market prices
Modelling
Permits
Q28
Q56
Sectoral planning
Strategic trade
Studies
Tariffs
Trade relations
Welfare measurement
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:In a model inspired by the EU Emissions Trading Scheme, non-cooperative countries allocate their emissions to internationally trading and non-trading sectors. Each country is better off with trading than without, and aggregate welfare is maximized with all sectors in the trading scheme. We analyze the effects of extending the sectoral coverage of the trading scheme in a two-country model with quadratic abatement costs. If only the original trading sector is asymmetric between countries, the welfare change is always positive and the same in both countries. If the original and additional trading sectors are asymmetric, one country might lose, but there is an aggregate welfare gain. If the original trading sector and the non-trading sector are asymmetric, both countries always gain.
ISSN:0924-6460
1573-1502
DOI:10.1007/s10640-011-9470-1