The Distributional Effects of Carbon Regulation: Why Auctioned Carbon Permits are Attractive and Feasible
AbstractWe examine the distributional effects of carbon regulation. An auction of carbon permits is the best way to achieve carbon caps set by international negotiation to limit global climate change. An auction is preferred to grandfathering (giving polluters permits in proportion to past pollution), because it allows reduced tax distortions, provides more flexibility in distribution of costs, provides greater incentives for innovation, and reduces the need for politically contentious arguments over the allocation of rents.
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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 99eedecr.
Length: 21 pages
Date of creation: 1999
Date of revision: Feb 1998
Publication status: Published in Thomas Sterner, ed., The Market and the Environment, Cheltenham, United Kingdom: Edward Elgar, chapter 12, 1999.
Note: Working Paper
Contact details of provider:
Postal: Economics Department, University of Maryland, College Park, MD 20742-7211
Phone: (202) 318-0520
Fax: (202) 318-0520
Web page: http://www.cramton.umd.edu
Auctions; Carbon Auctions; Pollution;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
This paper has been announced in the following NEP Reports:
- NEP-AGR-1999-07-28 (Agricultural Economics)
- NEP-ALL-1999-07-28 (All new papers)
- NEP-CDM-1999-07-28 (Collective Decision-Making)
- NEP-ENE-1999-07-28 (Energy Economics)
- NEP-ENV-1999-07-28 (Environmental Economics)
- NEP-PUB-1999-07-28 (Public Finance)
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