Auctioning Greenhouse Gas Emissions Permits in Australia
AbstractThe allocation of permits is an important design aspect of an emissions trading scheme. Traditionally, governments have favoured the free allocation of greenhouse gas permits based on individual historical emissions (‘grandfathering’) or industry benchmark data. Particularly in the EU, the free allocation of permits has proven complex and inefficient and the distributional implications are politically difficult to justify; auctioning emissions permits has therefore become more popular. The EU is now moving to auction more than 50 per cent of all permits in 2013, and in the US the Regional Greenhouse Gas Initiative (RGGI) has begun auctioning more than 90 per cent of total allowances. Another case in point is the Australian proposal for a Carbon Pollution Reduction Scheme (CPRS), which provides for auctioning a significant share of total permits. This paper discusses the proposed Australian CPRS’s auction design. A major difference to other emissions trading schemes is that the CPRS plans to auction multiple vintages of emissions permits simultaneously.
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Bibliographic InfoPaper provided by University of Maryland, Department of Economics - Peter Cramton in its series Papers of Peter Cramton with number 09aghg.
Length: 28 pages
Date of creation: 2009
Date of revision: 2009
Publication status: Published in Australian Journal of Agricultural and Resource Economics, 54, 219-238, 2010
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Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
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Auctions; carbon auctions; greenhouse gas auctions;
Other versions of this item:
- 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.
- Betz, Regina & Seifert, Stefan & Cramton, Peter & Kerr, Suzi, 2009. "Auctioning Greenhouse Gas Emissions Permits in Australia," Research Reports 94878, Australian National University, Environmental Economics Research Hub.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-06-03 (All new papers)
- NEP-ENE-2009-06-03 (Energy Economics)
- NEP-ENV-2009-06-03 (Environmental Economics)
- NEP-EXP-2009-06-03 (Experimental Economics)
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.:
- Peter Cramton & Suzi Kerr, 2002.
"Tradeable Carbon Permit Auctions: How and Why to Auction Not Grandfather,"
Papers of Peter Cramton
02eptc, University of Maryland, Department of Economics - Peter Cramton, revised 06 May 2002.
- Cramton, Peter & Kerr, Suzi, 2002. "Tradeable carbon permit auctions: How and why to auction not grandfather," Energy Policy, Elsevier, vol. 30(4), pages 333-345, March.
- Kerr, Suzi & Cramton, Peter, 1998. "Tradable Carbon Permit Auctions: How and Why to Auction Not Grandfather," Discussion Papers dp-98-34, Resources For the Future.
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- Richard Engelbrecht-Wiggans & Charles M. Kahn, 1998. "Multi-unit auctions with uniform prices," Economic Theory, Springer, vol. 12(2), pages 227-258.
- Charles A. Holt & William Shobe & Dallas Burtraw & Karen Palmer & Jacob K. Goeree, 2007. "Auction Design for Selling CO2 Emission Allowances Under the Regional Greenhouse Gas Initiative," Reports 2007-03, Center for Economic and Policy Studies.
- David McAdams & Giuseppe Lopomo & Leslie Marx & Brian Murray, . "Carbon Allowance Auction Design: An Assessment of Options for the U.S," Working Papers 10-64, Duke University, Department of Economics.
- Giuseppe Lopomo & Leslie M. Marx & David McAdams & Brian Murray, 2011. "Carbon Allowance Auction Design: An Assessment of Options for the United States," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(1), pages 25-43, Winter.
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