A practical approach to offset permits in post Kyoto climate policy
AbstractInternational Carbon Offsets from developing countries and emerging economies such as permits from the Clean Development Mechanism (CDM) will potentially play an important role for cost containment in domestic greenhouse gas regulation schemes in industrialised countries. We analyse the potential role of offset permits assuming that major emitters such as the USA, Canada, Japan, Australia and New Zealand install domestic greenhouse gas regulation schemes to achieve the emissions reductions pledged in the Copenhagen Accord and seek cost containment. We estimate a potential demand for offset permits of 627 to 667 MtCO2e p.a. from industrialised countries. To describe the supply structure, we derive marginal abatement cost curves for developing countries and emerging economies. We find that developing countries and emerging economies can supply 627 to 667 MtCO2e p.a. at costs of approximately EUR 10 (in 2004 EUR), neglecting transaction costs and country specific risks. The highest potentials for the generation of carbon offsets are present in China, India and the rest of Asia. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 11-043.
Date of creation: 2011
Date of revision:
emissions trading; offsets; CDM; marginal abatement costs; climate policy;
Find related papers by JEL classification:
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
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