IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v117y2012i1p362-364.html
   My bibliography  Save this article

International emissions trading: Good or bad?

Author

Listed:
  • Holtsmark, Bjart
  • Sommervoll, Dag Einar

Abstract

Using a non-cooperative climate policy game applied in the literature, we find that an agreement with international emissions trading leads to increased emissions and reduced efficiency.

Suggested Citation

  • Holtsmark, Bjart & Sommervoll, Dag Einar, 2012. "International emissions trading: Good or bad?," Economics Letters, Elsevier, vol. 117(1), pages 362-364.
    • Handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:362-364
    DOI: 10.1016/j.econlet.2012.05.034
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176512003023
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2012.05.034?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cramton Peter & Stoft Steven, 2010. "Price Is a Better Climate Commitment," The Economists' Voice, De Gruyter, vol. 7(1), pages 1-7, February.
    2. Helm, Carsten, 2003. "International emissions trading with endogenous allowance choices," Journal of Public Economics, Elsevier, vol. 87(12), pages 2737-2747, December.
    3. Carbone, Jared C. & Helm, Carsten & Rutherford, Thomas F., 2009. "The case for international emission trade in the absence of cooperative climate policy," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 266-280, November.
    4. Odd Godal & Bjart Holtsmark, 2011. "Permit Trading: Merely an Efficiency‐Neutral Redistribution away from Climate‐Change Victims?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(4), pages 784-797, December.
    5. MacKenzie, Ian A., 2011. "Tradable permit allocations and sequential choice," Resource and Energy Economics, Elsevier, vol. 33(1), pages 268-278, January.
    6. Finus, Michael, 2008. "Game Theoretic Research on the Design of International Environmental Agreements: Insights, Critical Remarks, and Future Challenges," International Review of Environmental and Resource Economics, now publishers, vol. 2(1), pages 29-67, June.
    7. Peter Cramton & Steven Stoft, 2010. "International Climate Games: From Caps to Cooperation," Papers of Peter Cramton 10icg, University of Maryland, Department of Economics - Peter Cramton, revised 2010.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bodansky, Daniel M. & Hoedl, Seth A. & Metcalf, Gilbert E. & Stavins, Robert N., "undated". "Facilitating Linkage of Heterogeneous Regional, National, and Sub-National Climate Policies Through a Future International Agreement," Climate Change and Sustainable Development 202114, Fondazione Eni Enrico Mattei (FEEM).
    2. Doda, Baran & Quemin, Simon & Taschini, Luca, 2019. "Linking permit markets multilaterally," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    3. Alessandro Tavoni & Ralph Winkler, 2021. "Domestic Pressure and International Climate Cooperation," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 225-243, October.
    4. Habla, Wolfgang & Winkler, Ralph, 2018. "Strategic delegation and international permit markets: Why linking May fail," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 244-250.
    5. Böhringer, Christoph & Dijkstra, Bouwe & Rosendahl, Knut Einar, 2014. "Sectoral and regional expansion of emissions trading," Resource and Energy Economics, Elsevier, vol. 37(C), pages 201-225.
    6. repec:zbw:hohpro:337-11 is not listed on IDEAS
    7. repec:old:wpaper:337-11 is not listed on IDEAS
    8. Bjart Holtsmark & Dag Einar Sommervoll, 2012. "International emissions trading in a noncooperative climate policy game," Discussion Papers 693, Statistics Norway, Research Department.
    9. Holtsmark, Katinka & Midttømme, Kristoffer, 2021. "The dynamics of linking permit markets," Journal of Public Economics, Elsevier, vol. 198(C).
    10. Chu‐chuan Cheng & Hsun Chu, 2020. "International emissions trading in a political economy," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 429-446, May.
    11. Simon Quemin & Christian Perthuis, 2019. "Transitional Restricted Linkage Between Emissions Trading Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 1-32, September.
    12. Harvey E. Lapan & Shiva Sikdar, 2019. "Is Trade in Permits Good for the Environment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 501-510, February.
    13. Nachtigall, Daniel, 2016. "Linking Emissions Trading Schemes in the Presence of Research and Develoment Spillovers," VfS Annual Conference 2016 (Augsburg): Demographic Change 145721, Verein für Socialpolitik / German Economic Association.
    14. Sungwan Hong & Seung-Gyu Sim, 2018. "Inelastic Supply of Fossil Energy and Competing Environmental Regulatory Policies," Sustainability, MDPI, vol. 10(2), pages 1-17, January.
    15. Baran Doda, Simon Quemin, Luca Taschini, 2017. "A theory of gains from trade in multilaterally linked ETSs," GRI Working Papers 275, Grantham Research Institute on Climate Change and the Environment.
    16. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2021. "Strategic Export Motives and Linking Emission Markets," CESifo Working Paper Series 8847, CESifo.
    17. Tapio Palokangas, 2019. "Emission permit trading with a self-interested regulator," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(3), pages 413-426, July.
    18. Bjart Holtsmark & Martin L. Weitzman, 2020. "On the Effects of Linking Cap-and-Trade Systems for $$\hbox {CO}_{2}$$CO2 Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 615-630, March.
    19. Balogh, Jeremiás Máté, 2021. "A kereskedelmi megállapodások szerepe a klímaváltozásban. Szakirodalmi áttekintés [The role of trade agreements in climate change. Systematic literature review]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 540-563.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bjart Holtsmark & Dag Einar Sommervoll, 2012. "International emissions trading in a noncooperative climate policy game," Discussion Papers 693, Statistics Norway, Research Department.
    2. Doda, Baran & Quemin, Simon & Taschini, Luca, 2019. "Linking permit markets multilaterally," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    3. Chu‐chuan Cheng & Hsun Chu, 2020. "International emissions trading in a political economy," Review of International Economics, Wiley Blackwell, vol. 28(2), pages 429-446, May.
    4. S. Yu & H.-P. Weikard & X. Zhu & E. C. Ierland, 2017. "International carbon trade with constrained allowance choices: Results from the STACO model," Annals of Operations Research, Springer, vol. 255(1), pages 95-116, August.
    5. Simon Quemin & Christian Perthuis, 2019. "Transitional Restricted Linkage Between Emissions Trading Schemes," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(1), pages 1-32, September.
    6. Peter Cramton & Steven Stoft, 2012. "Global Climate Games: How Pricing and a Green Fund Foster Cooperation," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    7. Nachtigall, Daniel, 2016. "Linking Emissions Trading Schemes in the Presence of Research and Develoment Spillovers," VfS Annual Conference 2016 (Augsburg): Demographic Change 145721, Verein für Socialpolitik / German Economic Association.
    8. Kai Lessmann & Robert Marschinski & Michael Finus & Ulrike Kornek & Ottmar Edenhofer, 2014. "Emissions Trading with Non-signatories in a Climate Agreement—an Analysis of Coalition Stability," Manchester School, University of Manchester, vol. 82, pages 82-109, December.
    9. Baran Doda & Simon Quemin & Luca Taschini, 2017. "A Theory of Gains from Trade in Multilaterally Linked ETSs," Working Papers 1706, Chaire Economie du climat.
    10. Thierry Bréchet & Yann Ménière & Pierre M. Picard, 2016. "The Clean Development Mechanism in a world carbon market," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 49(4), pages 1569-1598, November.
    11. Peter Cramton & Steven Stoft, 2010. "International Climate Games: From Caps to Cooperation," Papers of Peter Cramton 10icg, University of Maryland, Department of Economics - Peter Cramton, revised 2010.
    12. Bjart Holtsmark & Martin L. Weitzman, 2020. "On the Effects of Linking Cap-and-Trade Systems for $$\hbox {CO}_{2}$$CO2 Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 75(3), pages 615-630, March.
    13. Holtsmark, Katinka & Midttømme, Kristoffer, 2021. "The dynamics of linking permit markets," Journal of Public Economics, Elsevier, vol. 198(C).
    14. Harvey E. Lapan & Shiva Sikdar, 2019. "Is Trade in Permits Good for the Environment?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 501-510, February.
    15. Birgit Bednar-Friedl, 2012. "Climate policy targets in emerging and industrialized economies: the influence of technological differences, environmental preferences and propensity to save," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(2), pages 191-215, May.
    16. Gilbert E. Metcalf & David Weisbach, 2012. "Linking Policies When Tastes Differ: Global Climate Policy in a Heterogeneous World," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 6(1), pages 110-129.
    17. Almer, Christian & Winkler, Ralph, 2017. "Analyzing the effectiveness of international environmental policies: The case of the Kyoto Protocol," Journal of Environmental Economics and Management, Elsevier, vol. 82(C), pages 125-151.
    18. Habla, Wolfgang & Winkler, Ralph, 2018. "Strategic delegation and international permit markets: Why linking May fail," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 244-250.
    19. Steven M. Smith, 2019. "The Relative Economic Merits of Alternative Water Rights," Working Papers 2019-08, Colorado School of Mines, Division of Economics and Business.
    20. Gersbach, Hans & Winkler, Ralph, 2011. "International emission permit markets with refunding," European Economic Review, Elsevier, vol. 55(6), pages 759-773, August.

    More about this item

    Keywords

    Climate change; International environmental agreements; Emissions trading; Non-cooperative game theory;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:117:y:2012:i:1:p:362-364. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.