Auctioning Greenhouse Gas Emissions Permits in Australia
AbstractAllocating permits based on individual historical emissions (‘grandfathering’), or industry benchmark data, is an important design aspect of an emissions trading scheme. Free permit allocation has proven complex and inefficient (particularly in the European Union) with distribution implications also politically difficult to justify. For these reasons, auctioning emissions permits has become more popular than allocating permits. The European Union is now moving towards auctioning more than 50 per cent of all permits in 2013. In the US, the Regional Greenhouse Gas Initiative (RGGI) has started with auctioning 100 per cent of permits. The Australian proposal for a Carbon Pollution Reduction Scheme (CPRS) also provides for auctioning a significant share of total permits. This report discusses important theoretical and practical auction design aspects for allocating emissions permits in Australia. Particularly interesting is the proposal to simultaneously auction multiple emissions units of different vintages. The specific design details proposed have been adopted by the Australian Government in their CPRS White Paper.
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Bibliographic InfoPaper provided by Australian National University, Environmental Economics Research Hub in its series Research Reports with number 94878.
Date of creation: 22 May 2009
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Climate policy; Greenhouse gases; Auctions; Emissions trading; Environmental Economics and Policy; Resource /Energy Economics and Policy;
Other versions of this item:
- Betz, Regina & Seifert, Stefan & Cramton, Peter & Kerr, Suzi, 2010. "Auctioning greenhouse gas emissions permits in Australia," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(2), June.
- Regina Betz & Stefan Seifert & Peter Cramton & Suzi Kerr, 2009. "Auctioning Greenhouse Gas Emissions Permits in Australia," Papers of Peter Cramton 09aghg, University of Maryland, Department of Economics - Peter Cramton, revised 2009.
- Regina Betz & Stefan Seifert & Peter Cramton & Suzi Kerr, 2009. "Auctioning greenhouse gas emissions permits in Australia," Environmental Economics Research Hub Research Reports 0929, Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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