Does Distribution Matter? When Flexibility and Pareto-Efficiency in Greenhouse Gas Abatement
AbstractThis paper analyses banking and borrowing of carbon emission rights within the framework of a simple, integrated assessment model. Breaking the world economy in just two regions it will be shown: (1) Increasing when-flexibility in greenhouse gas abatement through banking and borrowing of carbon emission permits has a positive effect on welfare for regions with a poor endowment in carbon emission rights, but negatively affects rich-endowed regions. (2) Intergenerational fairness advocates intertemporal flexibility in greenhouse gas abatement, irrespectively of the initial allocation of carbon right. (3) Changing the degree of when-flexibility has only a small impact on global climate damages. (4) This is in contrast to the observation that the initial allocation of carbon emission rights has a significant impact on atmospheric carbon.
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Bibliographic InfoPaper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp0102.
Date of creation: Jul 2001
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Carbon rights; climate policy; integrated assessment; banking and trade;
Find related papers by JEL classification:
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- F2 - International Economics - - International Factor Movements and International Business
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-07-23 (All new papers)
- NEP-ENE-2001-07-23 (Energy Economics)
- NEP-ENV-2001-07-23 (Environmental Economics)
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