In or Out: Efficient inclusion of installations in an Emissions Trading Scheme?
AbstractRegulators around the world are currently considering national emissions trading systems (ETS) as a cost-effective way to reduce greenhouse gas emissions. ETS installations coverage is one of the numerous design issues confronting them. ‘Blanket coverage’ that includes all an economy’s industrial emitters of greenhouse gases has some intuitive appeal. Although it seems equitable it does not, however, take into full account all the costs related to the extent of coverage. This report shows how an alternative approach of ‘efficient coverage’ can achieve the same emission reduction outcome at lower social cost. The approach is based on maximising the benefits of including installations in an ETS, while at the same time taking into account all relevant transaction costs. A broad definition of transaction costs is used – the regulatory costs to the government as well as regulatory costs imposed on covered installations. Particularly for relatively modest emissions reduction targets, the study found there are significant cost savings with an ‘efficient coverage’ compared with ‘blanket coverage’.
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Bibliographic InfoPaper provided by Australian National University, Environmental Economics Research Hub in its series Research Reports with number 94877.
Date of creation: 22 May 2009
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More information through EDIRC
Emissions Trading Scheme; Environmental Policy; Installation Coverage; Transaction costs.; Environmental Economics and Policy; Resource /Energy Economics and Policy; Q50; Q58; H23;
Other versions of this item:
- Regina Betz & Todd Sanderson & Tihomir Ancev, 2009. "In or out? Efficient inclusion of installations in an emissions trading scheme," Environmental Economics Research Hub Research Reports 0928, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
- Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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- Christoph Böhringer & Bouwe Dijkstra & Knut Einar Rosendahl, 2011.
"Sectoral and regional expansion of emissions trading,"
654, Research Department of Statistics Norway.
- Christoph Böhringer & Dijkstra Bouwe & Knut Einar Rosendahl, 2011. "Sectoral and Regional Expansion of Emissions Trading," Working Papers V-337-11, University of Oldenburg, Department of Economics, revised Jun 2011.
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- Bouwe Dijkstra & Edward Manderson & Tae-Yeoun Lee, 2011. "Extending the Sectoral Coverage of an International Emission Trading Scheme," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 50(2), pages 243-266, October.
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