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Author: | Godal, O. Holtsmark, B. |
Title: | Permit trading: merely an efficiency-neutral redistribution away from climate-change victims? |
Journal: | Scandinavian Journal of Economics
2011 : DEC, VOL. 113:4, p. 784-797 |
Index terms: | markets air pollution trading environmental policy climate |
Language: | eng |
Abstract: | This article presents a climate-policy game allowing international emissions trading, where governments first opt for their emissions permits amount. These permits are transferred to firms, and then internationally traded on a competitive market. Comparing with a game without trading, it is found that the potential efficiency improvements from permit trading, identified in other studies, are totally undone if governments also put into operation a tax or subsidy on domestic emissions. In this case, the only impact of trading is a redistribution of income making the most affected by climate change worse off. |
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