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The Political Economy of International Emissions Trading Scheme Choice: A Theoretical Analysis

Author

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  • Jan-Tjeerd Boom
  • Gert Tinggaard Svendsen

Abstract

The Kyoto Protocol allows emissions trading between the Annex B countries. We consider three schemes of emissions trading: government trading, permit trading, and credit trading. The schemes are compared in a public choice setting focusing on group size and rent-seeking by interest groups. We find that industry will have most influence on government policy, with environmental organizations taking second place. Our conclusion is that most interest groups prefer a combination of government trading and credit trading even though permit trading is more efficient. Furthermore, some governments prefer government trading because it retains the possibility of hot air trading.

Suggested Citation

  • Jan-Tjeerd Boom & Gert Tinggaard Svendsen, 2000. "The Political Economy of International Emissions Trading Scheme Choice: A Theoretical Analysis," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 156(4), pages 548-548, December.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200012)156:4_548:tpeoie_2.0.tx_2-v
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    Cited by:

    1. Boom, Jan-Tjeerd, 2001. "International emissions trading under the Kyoto Protocol: : credit trading," Energy Policy, Elsevier, vol. 29(8), pages 605-613, June.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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