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Emission Quota Trade among the Few: Laboratory Evidence of Joint Implementation among Committed Countries The Complete Version

Author

Listed:
  • Bohm, Peter

    (Dept. of Economics, Stockholm University)

  • Carlén, Björn

    (Dept. of Economics, Stockholm University)

Abstract

The purpose of the laboratory tests reported here is to identify a well-functioning design, tailored for an upcoming unique experiment using real-world relevant decision makers for carbon emission reduction trade among four countries committed to binding carbon emission limits, a form of so-called joint implementation. For reasons given in the paper, the design is required to promote high trade efficiency and a small scope for arbitrage. All designs tested reached high levels of efficiency (87-99%), which is noteworthy given the small number of traders. Attempts to adjust design to reduce or eliminate arbitrage were successful in the final test rounds.

Suggested Citation

  • Bohm, Peter & Carlén, Björn, 1998. "Emission Quota Trade among the Few: Laboratory Evidence of Joint Implementation among Committed Countries The Complete Version," Research Papers in Economics 1997:5, Stockholm University, Department of Economics.
    • Handle: RePEc:hhs:sunrpe:1997_0005
    as

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    References listed on IDEAS

    as
    1. R. Andrew Muller & Stuart Mestelman, 1994. "Emission Trading with Shares and Coupons: A Laboratory Experiment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 185-211.
    2. R. Preston McAfee & John McMillan, 1996. "Analyzing the Airwaves Auction," Journal of Economic Perspectives, American Economic Association, vol. 10(1), pages 159-175, Winter.
    3. Cason, Timothy N. & Plott, Charles R., 1996. "EPA's New Emissions Trading Mechanism: A Laboratory Evaluation," Journal of Environmental Economics and Management, Elsevier, vol. 30(2), pages 133-160, March.
    4. Roth, Alvin E, 1994. "Lets Keep the Con out of Experimental Econ.: A Methodological Note," Empirical Economics, Springer, vol. 19(2), pages 279-289.
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    More about this item

    Keywords

    carbon emission reduction trade; joint implementation; experimental economics;
    All these keywords.

    JEL classification:

    • A23 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - Graduate
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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