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Carbon taxes, cap-and-trade administration, and US legislation

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  • WILLIAM WHITESELL

Abstract

An upstream cap-and-trade system that rations allowances for the carbon content of fuel inputs could achieve wider coverage than existing CO 2 emission programmes or most of those proposed in draft US legislation, but would risk shortages and price spikes. Allowance price volatility could be avoided with a CO 2 -price corridor established through auctions, similar in some respects to how central banks manage short-term interest rates with open market operations. Building on the central bank analogy, a Greenhouse Gas Board could be established with the 'instrument independence' to set annual CO 2 -price corridors in line with broadly-framed, long-term climate goals laid out in legislation. National and regional Boards of this nature might also help facilitate the international coordination of climate policies.

Suggested Citation

  • William Whitesell, 2007. "Carbon taxes, cap-and-trade administration, and US legislation," Climate Policy, Taylor & Francis Journals, vol. 7(5), pages 457-462, September.
    • Handle: RePEc:taf:tcpoxx:v:7:y:2007:i:5:p:457-462
    DOI: 10.1080/14693062.2007.9685668
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    1. Warwick J. McKibbin & Peter J. Wilcoxen, 2006. "A Credible Foundation For Long Term International Cooperation On Climate Change," CAMA Working Papers 2006-15, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Warwick J. McKibbin & Peter J. Wilcoxen, 1997. "A Better Way to Slow Global Climate Change," Economics and Environment Network Working Papers 9702, Australian National University, Economics and Environment Network.
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    Cited by:

    1. Qinglong Wang & Jiale Huang & Xian Zhang & Weina Qin & Huina Zhang & Yani Dong, 2022. "Climate Change and Human Response to Sustainable Environmental Governance Policy: Tax or Emissions Trading?," Sustainability, MDPI, vol. 14(15), pages 1-13, August.
    2. Yonghong Cheng & Zhongkai Xiong & Qinglin Luo, 2018. "Joint Pricing and Product Carbon Footprint Decisions and Coordination of Supply Chain with Cap-and-Trade Regulation," Sustainability, MDPI, vol. 10(2), pages 1-24, February.
    3. Wang, Tao & Foliente, Greg & Song, Xinyi & Xue, Jiawei & Fang, Dongping, 2014. "Implications and future direction of greenhouse gas emission mitigation policies in the building sector of China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 520-530.

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