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An Analysis of Alternative Emission Trading Strategies of Parties to the Kyoto Protocol

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  • Leo Schrattenholzer
  • Gerhard Totschnig

Abstract

This article analyzes the cost of Canada, Japan, and Western Europe of complying with the Kyoto Protocol and the possible revenues of Eastern Europe, Russia, and Ukraine in a set of scenarios, each of which reflecting one particular pattern of permit trading. One main focus was to investigate how a working Clean Development Mechanism (CDM) scheme may influence the market power of a possible cartel of "hot air" sellers. The results show that the compliance costs are significantly reduced with the availability of CDM and that these cost depend only weakly on the restrictions of the "hot air" supply. The greenhouse gas emission reductions of the trading scenarios are about 40% less than in a domestic measures onlyscenario. The analysis uses a modified version of the well-known MERGE model (Manne and Richels, 2004). Dieser Artikel analysiert die Kosten, die Japan, Kanada und Westeuropa infolge der Erfüllung ihrer Verpflichtungen gemäß dem Kyoto-Protokoll entstehen, sowie den möglichen Ertrag, den Osteuropa, Russland und die Ukraine aus dem Verkauf eines Teils ihrer Emissionszertifikate erlösen können. Für die Analyse werden verschiedene Szenarien angenommen, von denen jedes ein bestimmtes Muster des Emissionshandels widerspiegelt. Im Besonderen wurde der Einfluss eines funktionierenden CDM-Systems (Reduktionsgutschriften im Rahmen des "Clean Development Mechanism") auf die Marktdominanz eines möglichen solchen Kartells untersucht. Die Resultate zeigen, dass die Kosten der Erfüllung der Kyoto-Verpflichtungen stark abnehmen, wenn Reduktionsgutschriften im Rahmen des CDM verfügbar sind, und dass diese Kosten nur schwach von (Selbst-) Beschränkungen der Anbieter abhängen. Die Treibhausgasemissionsreduktionen für die Emissionshandelsszenarien sind etwa 40 % geringer als in einem Szenario ohne Emissionshandel. In der Analyse wird das weithin bekannte MERGE-Modell verwendet (Manne und Richels 2004).

Suggested Citation

  • Leo Schrattenholzer & Gerhard Totschnig, 2005. "An Analysis of Alternative Emission Trading Strategies of Parties to the Kyoto Protocol," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 74(2), pages 217-234.
    • Handle: RePEc:diw:diwvjh:74-2-9
    DOI: 10.3790/vjh.74.2.217
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    References listed on IDEAS

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    1. Springer, Urs, 2003. "The market for tradable GHG permits under the Kyoto Protocol: a survey of model studies," Energy Economics, Elsevier, vol. 25(5), pages 527-551, September.
    2. Christoph Bohringer, 2002. "Climate Politics from Kyoto to Bonn: From Little to Nothing?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 51-71.
    3. Odile Blanchard & Patrick Criqui & Alban Kitous, 2002. "After The Hague, Bonn and Marrakech : the future international market for emissions permits and the issue of hot air," Post-Print halshs-00196364, HAL.
    4. Michel G.J. den Elzen & Andr� P.G. de Moor, 2002. "Evaluating the Bonn-Marrakesh agreement," Climate Policy, Taylor & Francis Journals, vol. 2(1), pages 111-117, March.
    5. Bjart Holtsmark, 2003. "Russian behaviour in the market for permits under the Kyoto Protocol," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 399-415, December.
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