Through 2 March 2017, take advantage of trial access to explore Elgaronline Ebook Collections and the Elgar Encyclopedia of Environmental Law! Elgaronline provides access to the ebook versions of more than 3500 Elgar publications in the subject areas of law, economics, business, and social and political sciences. The Elgar Encyclopedia of Environmental Law is an online resource and twelve-volume collection on major themes relating to the environment, including water law, multilateral environmental treaties, and trade and environmental law.
For more information and to explore these resources during this limited trial period, visit Elgaronline here: https://www.elgaronline.com/. Select the “Browse” tab from the menu at the top of the page; then, under “Refine by access” in the menu on the left side of the page, select “All accessible content.” All materials accompanied by a green circle are available for consultation.
This paper simulates the saving in terms of the total abatement cost of CO2 emission reductions for different trading games reflecting the potential cooperation among organizations including the European Union (EU), the Asia-Pacific Economic Cooperation (APEC) countries, the Union of South American Nations (USAN), and the Indian Ocean Rim Association for Regional Cooperation (IOR-ARC). A game approach is conducted to determine if the cooperation will come into existence among the organizations stated above. A similar idea is applied to the four largest emission countries, China, the United States, Russia, and India, as four individual players in the trading game.
The EU Emissions Trading Scheme continues to exempt industries deemed at risk of carbon leakage from permit auctions. Carbon leakage risk is established based on the carbon intensity and trade exposure of each 4-digit industry.
This paper contributes to the literature on market power in emissions permits markets, modeling an emissions trading scheme in which polluters differ with respect to their marginal abatement costs at the business-as-usual emissions. The polluters play a two-stage static complete information game in which their market power arises endogenously from their characteristics. In the first stage all polluters bid in an auction for the distribution of the fixed supply of permits issued by the regulator, and in the second stage they trade these permits in a secondary market.
The article examines strategic incentives to subsidize green energy in a group of countries that operates an international carbon emissions trading scheme. Green subsidies of either sign on top of emissions cap regulation reduce the welfare of the group of countries, but this may not hold for individual countries. The cases of small and large countries turn out to exhibit significant differences. While small countries refrain from subsidizing green energy and thus implement the efficient allocation, large permit-importing countries may subsidize green energy in order to influence the permit price in their favor.
In this paper we incorporate tradable permits in a model of strategic environmental policy as an alternative policy scheme. In particular, we develop an international oligopoly model, where governments issue non-cooperatively a number of permits and then allow their trading by their polluting firms. Permits trading is a dominant strategy and it ensures that welfare is strictly higher than in a situation where permits are non-tradable. When the permits market is efficient, exporting countries have an incentive to tighten regulation in order to enhance their firms’ competitiveness. Allowing for market power in the permits market, the incentive to relax regulation may re-appear, yet it is comparatively weaker relative to the case of non-tradable permits. The benefits of this policy scheme disappear if the governments along with emission permits adopt an emissions subsidy.
Emissions trading systems (ETS) can play a major role in a cost-effective climate policy framework. Both direct linking of ETSs and indirect linking through a common crediting mechanism can reduce costs of action.We use a global recursive-dynamic computable general equilibrium model to assess the effects of direct and indirect linking of ETS systems across world regions. Linking of domestic Annex I ETSs leads to moderate aggregate cost savings, as differences in domestic permit prices are limited. Countries benefit directly from linking by either buying permits and avoiding investing in highcost mitigation options, or by exploiting relatively cheap mitigation options and selling permits at a higher price. Although the economy of the main permit sellers, such as Russia, is negatively affected by the real exchange rate appreciation that is induced by the large export of permits, on balance they also still benefit from linking. The costsaving potential for developed countries of well-functioning crediting mechanisms appears to be very large. Even limited use of credits would nearly halve mitigation costs; cost savings would be largest for carbon-intensive economies. However, one open issue iswhether these gains can be fully reaped in reality, given that direct linking and the use of crediting mechanisms both raise complex system design and implementation issues. The analysis in this paper shows, however, that the potential gains to be reaped are so large, that substantial efforts in this domain are warranted.