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Comparing Permit Allocation Options: The Main Points

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    Abstract

    In discussions about the policy design of domestic emission trading, e.g., when implementing the Kyoto Protocol, the two permit allocation alternatives ­ auctioning and allocation gratis (grandfathering) ­ are often pitted against each other as representing utopian cost-effectiveness and political realism, respectively. In this note, an attempt is made to extract the main points of a comparison between the two options with respect to efficiency and distribution.

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    File URL: http://www2.ne.su.se/paper/wp02_11.pdf
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    Bibliographic Info

    Paper provided by Stockholm University, Department of Economics in its series Research Papers in Economics with number 2002:11.

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    Length: 7 pages
    Date of creation: 20 Apr 2002
    Date of revision:
    Handle: RePEc:hhs:sunrpe:2002_0011

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    Keywords: Domestic carbon emissions trading; permit allocation; grandfathering; auctioning; cost effectiveness; Kyoto protocol;

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