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A Global Carbon Market?

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  • Michael G. Pollitt

Abstract

This paper explores the prospects for a global carbon market as the centrepiece of any serious attempt to reach the ambitious goal for greenhouse gas (GHG) reductions set by climate scientists. My aim is to clarify the extent to which we know what policy might best support global decarbonisation. I begin by discussing what we might mean by a global carbon market and its theoretical properties. I proceed to discuss the EU Emissions Trading System experience and the recent experience with the Australian carbon tax. Next, I assess the evolving carbon market initiatives in the US and in China. In the conclusion, I apply some principles of ‘good’ energy policy making to the prospects for a successful global carbon market.

Suggested Citation

  • Michael G. Pollitt, 2016. "A Global Carbon Market?," Cambridge Working Papers in Economics 1615, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1615
    Note: mgp20
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    References listed on IDEAS

    as
    1. Michael G. Pollitt, 2015. "In Search of 'Good' Energy Policy: The Social Limits to Technological Solutions to Energy and Climate Problems," Working Papers EPRG 1520, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Smith, Stephen, 1998. "Environmental and Public Finance Aspects of the Taxation of Energy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 14(4), pages 64-83, Winter.
    3. Malte Meinshausen & Nicolai Meinshausen & William Hare & Sarah C. B. Raper & Katja Frieler & Reto Knutti & David J. Frame & Myles R. Allen, 2009. "Greenhouse-gas emission targets for limiting global warming to 2 °C," Nature, Nature, vol. 458(7242), pages 1158-1162, April.
    4. repec:dau:papers:123456789/10174 is not listed on IDEAS
    5. Grubb,Michael & Jamasb,Tooraj & Pollitt,Michael G. (ed.), 2008. "Delivering a Low Carbon Electricity System," Cambridge Books, Cambridge University Press, number 9780521888844.
    6. Martin L. Weitzman, 1974. "Prices vs. Quantities," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 477-491.
    7. Martin L. Weitzman, 2015. "Internalizing the Climate Externality: Can a Uniform Price Commitment Help?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    8. Roland Ismer & Karsten Neuhoff, 2007. "Border tax adjustment: a feasible way to support stringent emission trading," European Journal of Law and Economics, Springer, vol. 24(2), pages 137-164, October.
    9. Alex Robson, 2014. "Australia's Carbon Tax: An Economic Evaluation," Economic Affairs, Wiley Blackwell, vol. 34(1), pages 35-45, February.
    10. Christian Gollier and Jean Tirole, 2015. "Negotiating effective institutions against climate change," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
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    Cited by:

    1. Marcin Rabe & Dalia Streimikiene & Yuriy Bilan, 2019. "EU Carbon Emissions Market Development and Its Impact on Penetration of Renewables in the Power Sector," Energies, MDPI, vol. 12(15), pages 1-20, August.

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    More about this item

    Keywords

    carbon market; carbon tax; EU ETS;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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