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Comparing Permit Allocation Options: The Main Points


  • Bohm, Peter

    (Dept. of Economics, Stockholm University)


In discussions about the policy design of domestic emission trading, e.g., when implementing the Kyoto Protocol, the two permit allocation alternatives ­ auctioning and allocation gratis (grandfathering) ­ are often pitted against each other as representing utopian cost-effectiveness and political realism, respectively. In this note, an attempt is made to extract the main points of a comparison between the two options with respect to efficiency and distribution.

Suggested Citation

  • Bohm, Peter, 2002. "Comparing Permit Allocation Options: The Main Points," Research Papers in Economics 2002:11, Stockholm University, Department of Economics.
  • Handle: RePEc:hhs:sunrpe:2002_0011

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    References listed on IDEAS

    1. Cremer, Helmuth & Pestieau, Pierre, 1996. "Bequests as a Heir "Discipline Device."," Journal of Population Economics, Springer;European Society for Population Economics, vol. 9(4), pages 405-414, November.
    2. Tomes, Nigel, 1981. "The Family, Inheritance, and the Intergenerational Transmission of Inequality," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 928-958, October.
    3. Stark, Oded, 1998. "Equal bequests and parental altruism: compatibility or orthogonality?," Economics Letters, Elsevier, vol. 60(2), pages 167-171, August.
    4. Laitner, John, 1993. "Intergenerational and interhousehold economic links," Handbook of Population and Family Economics,in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 5, pages 189-238 Elsevier.
    5. Wilhelm, Mark O, 1996. "Bequest Behavior and the Effect of Heirs' Earnings: Testing the Altruistic Model of Bequests," American Economic Review, American Economic Association, vol. 86(4), pages 874-892, September.
    6. Dunn, Thomas A. & Phillips, John W., 1997. "The timing and division of parental transfers to children," Economics Letters, Elsevier, vol. 54(2), pages 135-137, February.
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    Cited by:

    1. Bode, Sven, 2006. "Multi-period emissions trading in the electricity sector--winners and losers," Energy Policy, Elsevier, vol. 34(6), pages 680-691, April.

    More about this item


    Domestic carbon emissions trading; permit allocation; grandfathering; auctioning; cost effectiveness; Kyoto protocol;

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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