Reduced deforestation and the carbon market: the role of market regulations and future commitments
Reducing emissions from deforestation and degradation (REDD) has been proposed as an economic and extensive source of emission abatement to supplement other long-term climate policies. However, critics suggest an excess supply of REDD credits may disrupt emerging carbon markets and raise north–south equity concerns. In this context, we investigate the economic implications of REDD regulations and future emissions reduction commitments. Numerical model simulations show that unrestricted exchange of REDD units reduces the international carbon price by half and cuts compliance costs by roughly one-third. Developed nations’ requirements for policy supplementarity, which restrict demand for REDD credits, reduce such price impacts but go at the expense of both economic efficiency and benefits to rainforest areas. Instead, unlimited REDD access facilitates climate policy targets to be tightened by almost a quarter at constant compliance cost, tripling the environmental ambition of the Kyoto Protocol and providing considerable wealth transfers to developing countries.
Volume (Year): 17 (2012)
Issue (Month): 03 (June)
|Contact details of provider:|| Postal: |
Web page: http://journals.cambridge.org/jid_EDE
When requesting a correction, please mention this item's handle: RePEc:cup:endeec:v:17:y:2012:i:03:p:269-292_00. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keith Waters)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.