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Tradable Carbon Permits in Europe: Feasibility and Comparison with Taxes

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  • PAUL KOUTSTAAL
  • ANDRIES NENTJES

Abstract

In the European Union (EU) the discussions on climate policy have focused on the instrument of taxation. However, there has been considerable opposition from both Member States and industry against the combined carbodenergy tax proposals. In this article, an alternative market‐oriented instrument for controlling CO2 emissions is discussed which overcomes some of the disadvantages of the tax: tradable emission permits. Special regard is given to the functional design and practical implementation of a system of tradable carbon permits for the European Union. Furthermore, tradable carbon permits are compared with a carbon tax.

Suggested Citation

  • Paul Koutstaal & Andries Nentjes, 1995. "Tradable Carbon Permits in Europe: Feasibility and Comparison with Taxes," Journal of Common Market Studies, Wiley Blackwell, vol. 33(2), pages 219-233, June.
    • Handle: RePEc:bla:jcmkts:v:33:y:1995:i:2:p:219-233
    DOI: 10.1111/j.1468-5965.1995.tb00528.x
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    Cited by:

    1. Evy Crals & Lode Vereeck, 2005. "Taxes, Tradable Rights and Transaction Costs," European Journal of Law and Economics, Springer, vol. 20(2), pages 199-223, September.
    2. Brockmann, Karl Ludwig & Koschel, Henrike & Schmidt, Tobias F. N., 1998. "Tradable SO-2-permits in the European Union: a practicable scheme for public utilities," ZEW Discussion Papers 98-15, ZEW - Leibniz Centre for European Economic Research.
    3. Hongbo Duan, Lei Zhu, Gürkan Kumbaroglu, and Ying Fan, 2016. "Regional Opportunities for China To Go Low-Carbon: Results from the REEC Model," The Energy Journal, International Association for Energy Economics, vol. 0(China Spe).
    4. A. Michaelowa, 1996. "Incentive Aspects of Joint Implementation of Greenhouse Gas Reduction," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 1(1), pages 95-108, January.
    5. Simon Niemeyer, 1998. "Consumer-based carbon reduction incentives," Working Papers in Ecological Economics 9805, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program.
    6. Pezzey, John C.V., 2001. "Distributing the Value of a Country’s Tradeable Carbon Permits," 2001 Conference (45th), January 23-25, 2001, Adelaide, Australia 125832, Australian Agricultural and Resource Economics Society.
    7. Woerdman, Edwin, 2000. "Organizing emissions trading: the barrier of domestic permit allocation," Energy Policy, Elsevier, vol. 28(9), pages 613-623, July.

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