Advanced Search
MyIDEAS: Login to save this article or follow this journal

Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost

Contents:

Author Info

  • Harrison Fell
  • Dallas Burtraw
  • Richard Morgenstern
  • Karen Palmer

Abstract

Emission offsets within cap-and-trade systems are widely believed to contain system costs and stabilize allowance prices. However, trends in offsets supply are uncertain, may be persistent, and may be correlated with other sources of uncertainty. In a dynamic stochastic model we find total costs increase, as does variability in allowance prices and emissions, as uncertainty in offsets becomes more persistent and, to a lesser extent, becomes negatively correlated with uncertainty in abatement costs. These results are amplified with risk sensitivity, larger annual offset limits, and competitive offset purchasing. Imposing an allowance price collar can mitigate cost increases and price variability.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://le.uwpress.org/cgi/reprint/88/3/589
Download Restriction: A subscripton is required to access pdf files. Pay per article is available.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by University of Wisconsin Press in its journal Land Economics.

Volume (Year): 88 (2012)
Issue (Month): 3 ()
Pages: 589-611

as in new window
Handle: RePEc:uwp:landec:v:88:y:2012:iii:1:p:589-611

Contact details of provider:
Web page: http://le.uwpress.org/

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
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.:
as in new window
  1. Shaul Ben-David & David Brookshire & Stuart Burness & Michael McKee & Christian Schmidt, 2000. "Attitudes toward Risk and Compliance in Emission Permit Markets," Land Economics, University of Wisconsin Press, University of Wisconsin Press, vol. 76(4), pages 590-600.
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 in new window

Cited by:
  1. Suzi Kerr & Adam Millard-Ball, 2012. "Cooperation To Reduce Developing Country Emissions," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1250023-1-1.
  2. Heather Klemick, 2012. "What is the Optimal Offsets Discount under a Second-Best Cap & Trade Policy?," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 201204, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Jul 2012.
  3. Stocking, Andrew, 2010. "Unintended Consequences of Price Controls: An Application to Allowance Markets," MPRA Paper 25559, University Library of Munich, Germany.
  4. Andrew Yates, 2012. "On a Fundamental Advantage of Permits Over Taxes for the Control of Pollution," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 51(4), pages 583-598, April.
  5. Horowitz, John & Ueda, Kohei, 2013. "Paying Farmers to Reduce Nitrogen Application on Corn: The Baseline Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150561, Agricultural and Applied Economics Association.
  6. Claassen, Roger & Duquette, Eric & Horowitz, John & Kohei, Ueda, 2014. "Additionality in U.S. Agricultural Conservation and Regulatory Offset Programs," Economic Research Report, United States Department of Agriculture, Economic Research Service 180414, United States Department of Agriculture, Economic Research Service.
  7. Gonzalex-Ramirez, Jimena & Kling, Catherine Louise & valcu, adriana, 2012. "An Overview of Carbon Offsets from Agriculture," Staff General Research Papers, Iowa State University, Department of Economics 35575, Iowa State University, Department of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:uwp:landec:v:88:y:2012:iii:1:p:589-611. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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