search query: @freeterm emissions / total: 13
reference: 8 / 13
| Author: | Rosendahl, K.E. |
| Title: | Incentives and prices in an emissions trading scheme with updating |
| Journal: | Journal of Environmental Economics and Management
2008 : JUL, VOL. 56:1, p. 69-82 |
| Index terms: | incentives prices trading |
| Freeterms: | emissions quotas |
| Language: | eng |
| Abstract: | Emissions trading schemes with allocations based on updated baseline emissions, give firms less incentive to reduce emissions for a given quota or allowance price. This paper shows that the cost-effective solution may be infeasible in case of marginal abatement costs (herein as: abt-costs) growing too fast. Furthermore, if a price cap or banking/borrowing is introduced, the abt. profile no longer is the same as in the case with an auction. In addition, it is shown that with allocation based on updated emissions, the quota price will always exceed marginal abt-costs, possibly misguiding policy makers and investors about abt-costs. Based on numerical simulations, it is indicated that the quota price most likely will be many times higher than marginal abt-costs, excluded that a marked share of allowances is auctioned. |
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