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The Carbon Trading Game

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  • Roger Fouquet

Abstract

In response to the Kyoto Protocol, an international market for carbon dioxide tradable permits is likely to be created. Two of the key issues involved are explaining the concepts of tradable permits to industrialists, policy-makers and the man on the street, and anticipating how the market will evolve. A simple game of the market for carbon dioxide tradable permits has been developed and used that can help deal with both issues. As a pedagogical tool, this game benefits from simplicity (just a few pieces of paper are needed) and enables students to grasp the concepts and remember them through the intensity and fun of a trading 'pit'. The experiences also provide substantial insights into the evolution of the carbon dioxide permit market, particularly related to the evolution of trade volume, permit prices and country strategies.© 2003 Elsevier B.V. All rights reserved.

Suggested Citation

  • Roger Fouquet, 2003. "The Carbon Trading Game," Climate Policy, Taylor & Francis Journals, vol. 3(sup2), pages 143-155, December.
    • Handle: RePEc:taf:tcpoxx:v:3:y:2003:i:sup2:p:s143-s155
    DOI: 10.1016/j.clipol.2003.09.011
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    File URL: http://hdl.handle.net/10.1016/j.clipol.2003.09.011
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    Cited by:

    1. Stefano Carattini & Eli P. Fenichel & Alexander Gordan & Patrick Gourley, 2020. "For want of a chair: Teaching price formation using a cap and trade game," The Journal of Economic Education, Taylor & Francis Journals, vol. 51(1), pages 52-66, January.

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