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The economics of Kyoto flexible mechanisms: a survey


  • Haoran Pan

    () (K.U.Leuven, C.E.S., Energy, Transport and Environment)


Scientific study has revealed that man-made greenhouse gas emissions are causing global warming. A milestone of international effort for combating global warming was the establishment of the Kyoto Protocol to the United Nations Framework Convention on Climate Change in 1997. The Protocol sets out a 5% emission reduction target from 1990 level for Annex I region in 2010. Economic research has foreseen that it will be very costly for some industrial countries to comply the target individually and therefore suggested international co-operation through flexible mechanisms - Emissions Trading, Joint Implementation and Clean Development Mechanism. Because main greenhouse gases have the uniform-mixing feature, the use of the flexible mechanisms could be both environmentally and economically effective. Recently emerged a number of theoretical and empirical studies to explore the economics of the mechanisms. This paper is intended to survey the existing research results with the mechanisms, including conceptual clarifications, cost and benefit analysis, potential problems, empirical findings, and perspectives for future research.

Suggested Citation

  • Haoran Pan, 2001. "The economics of Kyoto flexible mechanisms: a survey," Energy, Transport and Environment Working Papers Series ete0111, KU Leuven, Department of Economics - Research Group Energy, Transport and Environment.
  • Handle: RePEc:ete:etewps:ete0111

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    References listed on IDEAS

    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
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    3. Gould, John P., 1974. "Risk, stochastic preference, and the value of information," Journal of Economic Theory, Elsevier, vol. 8(1), pages 64-84, May.
    4. Hess, James, 1982. "Risk and the gain from information," Journal of Economic Theory, Elsevier, vol. 27(1), pages 231-238, June.
    5. Yves Zenou, 2003. "The Spatial Aspects of Crime," Journal of the European Economic Association, MIT Press, vol. 1(2-3), pages 459-467, 04/05.
    6. Franckx Laurent, 2002. "Ambient environmental inspections and commitment towards enforcement policies: substitutes or complements?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 2(1), pages 1-20, January.
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    Cited by:

    1. Mikel González & Francisco Greño, 2004. "Impacto Económico del Protocolo de Kyoto: Una aplicación para el País Vasco," Economic Working Papers at Centro de Estudios Andaluces E2004/34, Centro de Estudios Andaluces.

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    global warming; Kyoto Protocol; flexible mechanisms;

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