Emission Trading Scheme in the Maritime Industry: An experimental analysis
AbstractThe International Maritime Organization has proposed the implementation of a carbon dioxide emission trading scheme for the industry. Two problems associated with this is that of high noncompliance rate and the need to reconcile the both IMO and UNFCCC principles. This study reports a laboratory experiment to examine two design features of the potential scheme that are related to the problems identified. Our experimental parameters approximate the possible allocation method and other features of the maritime industry. Two key findings from this study are, (1) Implementation of the dynamic enforcement model reduces both permit noncompliance and report noncompliance relative to the static enforcement model and (2) The initial allocation of permits, which provides a solution to reconcile the two conflicting principle, impacts on the efficiency of the scheme.The International Maritime Organization has proposed the implementation of a carbon
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Bibliographic InfoPaper provided by National University of Singapore, Department of Economics, SCAPE in its series SCAPE Policy Research Working Paper Series with number 1101.
Length: 26 pages
Date of creation: Feb 2011
Date of revision:
Emission Trading Scheme; Experiment Maritime; Dynamic Enforcement; Initial Allocation;
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- Cason, Timothy N., 2010. "What Can Laboratory Experiments Teach Us About Emissions Permit Market Design?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), April.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
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