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Emission Taxes and Tradeable Permits A Comparison of Views on Long-Run Efficiency

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Author Info
John Pezzey ()
Abstract

We compare three different views on the long runefficiencies of emission taxes which includethresholds (inframarginalexemptions), and of tradeable emission permitswhere some permits areinitially free. The differences are caused bydifferent assumptions aboutwhether thresholds and free permits should besubsidies given only to firmsthat produce, or full property rights. Treatingtax thresholds, as well asfree permits, as property rights would departfrom the conventional view,but would allow greater flexibility in makingeconomic instruments bothefficient and acceptable. Such flexibilitycould be very important inachieving efficient control of greenhouse gasemissions. Copyright Kluwer Academic Publishers 2003

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File URL: http://hdl.handle.net/10.1023/A:1026393028473
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Publisher Info
Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 26 (2003)
Issue (Month): 2 (October)
Pages: 329-342
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Handle: RePEc:kap:enreec:v:26:y:2003:i:2:p:329-342

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Related research
Keywords: efficiency; emission taxes; exemptions; thresholds; tradeable permits;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  3. Spulber, Daniel F., 1985. "Effluent regulation and long-run optimality," Journal of Environmental Economics and Management, Elsevier, vol. 12(2), pages 103-116, June. [Downloadable!] (restricted)
  4. Pizer, William A., 2002. "Combining price and quantity controls to mitigate global climate change," Journal of Public Economics, Elsevier, vol. 85(3), pages 409-434, September. [Downloadable!] (restricted)
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  9. Lawrence H. Goulder & Ian W.H. Parry & Dallas Burtraw, 1997. "Revenue-Raising versus Other Approaches to Environmental Protection: The Critical Significance of Preexisting Tax Distortions," RAND Journal of Economics, The RAND Corporation, vol. 28(4), pages 708-731, Winter. [Downloadable!] (restricted)
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  11. John C. V. Pezzey, 2002. "EmissionTaxes and Tradable Permits: A Comparison of views on Long Run Efficiency," Economics and Environment Network Working Papers 0210, Australian National University, Economics and Environment Network. [Downloadable!]
  12. Svendsen, Gert Tinggaard & Daugbjerg, Carsten & Hjollund, Lene & Pedersen, Anders Branth, 2001. "Consumers, industrialists and the political economy of green taxation: CO2 taxation in OECD," Energy Policy, Elsevier, vol. 29(6), pages 489-497, May. [Downloadable!] (restricted)
  13. Jensen, Jesper & Rasmussen, Tobias N., 2000. "Allocation of CO2 Emissions Permits: A General Equilibrium Analysis of Policy Instruments," Journal of Environmental Economics and Management, Elsevier, vol. 40(2), pages 111-136, September. [Downloadable!] (restricted)
  14. Ekins, Paul & Barker, Terry, 2001. " Carbon Taxes and Carbon Emissions Trading," Journal of Economic Surveys, Blackwell Publishing, vol. 15(3), pages 325-76, July. [Downloadable!] (restricted)
  15. Farrow, Scott, 1995. "The dual political economy of taxes and tradable permits," Economics Letters, Elsevier, vol. 49(2), pages 217-220, August. [Downloadable!] (restricted)
  16. Farrow, Scott, 1999. "The duality of taxes and tradable permits: A survey with applications in Central and Eastern Europe," Environment and Development Economics, Cambridge University Press, vol. 4(04), pages 519-535, October. [Downloadable!]
  17. Donald N. Dewees, 2001. "Emissions Trading: ERCs or Allowances?," Land Economics, University of Wisconsin Press, vol. 77(4), pages 513-526. [Downloadable!] (restricted)
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  19. John Pezzey, 1992. "The Symmetry between Controlling Pollution by Price and Controlling It by Quantity," Canadian Journal of Economics, Canadian Economics Association, vol. 25(4), pages 983-91, November. [Downloadable!] (restricted)
  20. Felder, Stefan & Schleiniger, Reto, 2002. "Environmental tax reform: efficiency and political feasibility," Ecological Economics, Elsevier, vol. 42(1-2), pages 107-116, August. [Downloadable!] (restricted)
  21. Peter Cramton & Suzi Kerr, 1999. "The Distributional Effects of Carbon Regulation: Why Auctioned Carbon Permits are Attractive and Feasible," Papers of Peter Cramton 99eedecr, University of Maryland, Department of Economics - Peter Cramton, revised Feb 1998. [Downloadable!]
  22. Joskow, Paul L & Schmalensee, Richard, 1998. "The Political Economy of Market-Based Environmental Policy: The U.S. Acid Rain Program," Journal of Law & Economics, University of Chicago Press, vol. 41(1), pages 37-83, April.
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  24. Warwick J. McKibbin & Peter J. Wilcoxen, 1997. "Salvaging the Kyoto Climate Change Negotiations," Economics and Environment Network Working Papers 9704, Australian National University, Economics and Environment Network. [Downloadable!]
  25. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September. [Downloadable!] (restricted)
  26. Donald N. Dewees, 2000. "Emissions Trading: ERCs or Allowances," Working Papers dewees-00-01, University of Toronto, Department of Economics. [Downloadable!]
  27. Pizer, William, 1997. "Prices vs. Quantities Revisited: The Case of Climate Change," Discussion Papers dp-98-02, Resources For the Future. [Downloadable!]
  28. Margaret Wilkinson, 1994. "Paying for public spending: is there a role for earmarked taxes?," Fiscal Studies, Institute for Fiscal Studies, vol. 15(4), pages 119-35, November. [Downloadable!]
  29. Kling, Catherine L. & Zhao, Jinhua, 2000. "On the long-run efficiency of auctioned vs. free permits," Economics Letters, Elsevier, vol. 69(2), pages 235-238, November. [Downloadable!] (restricted)
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  30. Stavins, Robert N, 1998. "What Can We Learn from the Grand Policy Experiment? Lessons from SO2 Allowance Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 69-88, Summer. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. T. Nicolaus Tideman & Florenz Plassmann, 2007. "A Pricing Mechanism for CO2 Emissions that Incorporates Future Revisions of Estimates of the Cost of Today?s Emissions," Working Papers e07-9, Virginia Polytechnic Institute and State University, Department of Economics. [Downloadable!]
  2. Ralph Winkler, 2008. "Optimal compliance with emission constraints: dynamic characteristics and the choice of technique," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(4), pages 411-432, April. [Downloadable!] (restricted)
  3. Baldursson, Fridrik M. & von der Fehr, Nils-Henrik M., 2009. "Price volatility and risk exposure: on the interaction of quota and product markets," MPRA Paper 14994, University Library of Munich, Germany. [Downloadable!]
    Other versions:
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