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Does Distribution Matter? Efficiency, Equity and Flexibility in Greenhouse Gas Abatement

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  • Gunter Stephan

  • Georg Müller-Fürstenberger

Abstract

This paper analyses banking and borrowing ofcarbon emission rights within the framework ofa simple, integrated assessment model. Breaking the world economy in just two regionsit will be shown: (1) Increasing intertemporal flexibility in greenhouse gasabatement through banking and borrowing ofcarbon emission permits has a positive effecton welfare for regions with a poor endowment incarbon emission rights, but negatively affectsrich-endowed regions. (2) Intergenerationalfairness advocates intertemporal flexibility ingreenhouse gas abatement, irrespectively of theinitial allocation of carbon rights. (3)Optimal carbon accumulation is not independentof the initial allocation of carbon rights. Different initial sharing rules clearlyinfluence the development of atmospheric carbonconcentration. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Gunter Stephan & Georg Müller-Fürstenberger, 2004. "Does Distribution Matter? Efficiency, Equity and Flexibility in Greenhouse Gas Abatement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(1), pages 87-107, January.
    • Handle: RePEc:kap:enreec:v:27:y:2004:i:1:p:87-107
    DOI: 10.1023/B:EARE.0000016807.01447.b4
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    References listed on IDEAS

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    Cited by:

    1. Christoph Bohringer & Heinz Welsch, 2006. "Burden sharing in a greenhouse: egalitarianism and sovereignty reconciled," Applied Economics, Taylor & Francis Journals, vol. 38(9), pages 981-996.
    2. Zerriffi, Hisham & Wilson, Elizabeth, 2010. "Leapfrogging over development? Promoting rural renewables for climate change mitigation," Energy Policy, Elsevier, vol. 38(4), pages 1689-1700, April.
    3. Beilei Cai & Trudy Cameron & Geoffrey Gerdes, 2010. "Distributional Preferences and the Incidence of Costs and Benefits in Climate Change Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 429-458, August.
    4. Georg M ller-F rstenberger & Gunter Stephan, 2005. "Intensity Targeting or Emission CAPS: Non-Cooperative Climate Change Policies and Technological Change," Diskussionsschriften dp0502, Universitaet Bern, Departement Volkswirtschaft.

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