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Economic, institutional and technological uncertainties of emissions trading—a system dynamics modeling approach

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  • Irina Dolgopolova
  • Bo Hu
  • Armin Leopold
  • Stefan Pickl

Abstract

System dynamics models are employed for analyzing the impact of different uncertainties on carbon emission trading–both on national and business levels. Economic, institutional and technological uncertainties significantly influence any country's benefits from emission permit trading. If a country participates in trading on the international market then the possible price range becomes the source of additional uncertainty. In the case of business investment decisions for implementing resource‐saving technology, our system dynamics model shows that the first‐mover investor will get significantly fewer advantages than his followers, which leads to delay in primary investment to the sector. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Irina Dolgopolova & Bo Hu & Armin Leopold & Stefan Pickl, 2014. "Economic, institutional and technological uncertainties of emissions trading—a system dynamics modeling approach," Climatic Change, Springer, vol. 124(3), pages 663-676, June.
    • Handle: RePEc:spr:climat:v:124:y:2014:i:3:p:663-676
    DOI: 10.1007/s10584-013-1006-y
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    References listed on IDEAS

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    1. Chang, Kai & Zhang, Chao & Chang, Hao, 2016. "Emissions reduction allocation and economic welfare estimation through interregional emissions trading in China: Evidence from efficiency and equity," Energy, Elsevier, vol. 113(C), pages 1125-1135.

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