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Partial International Emission Trading

Author

Listed:
  • Bouwe R. Dijkstra
  • Edward Manderson
  • Tae-Yeoun Lee

Abstract

In a model inspired by the EU Emissions Trading Scheme, non-cooperative countries allocate their emissions to internationally trading and non-trading sectors. Each country is better off with trading than without, and aggregate welfare is maximized with all sectors in the trading scheme. We simulate the effects of expanding the trading scheme in a two-country model with quadratic abatement costs. If only the original trading sector is asymmetric between countries, the welfare change is always positive and the same in both countries. If only the additional trading sector is asymmetric, one country might lose, but there is an aggregate welfare gain. If only the non-trading sector is asymmetric, both countries always gain.

Suggested Citation

  • Bouwe R. Dijkstra & Edward Manderson & Tae-Yeoun Lee, "undated". "Partial International Emission Trading," Discussion Papers 08/27, University of Nottingham, GEP.
  • Handle: RePEc:not:notgep:08/27
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    File URL: http://www.nottingham.ac.uk/gep/documents/papers/2008/08-27.pdf
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    References listed on IDEAS

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      • Ellerman,A. Denny & Joskow,Paul L. & Schmalensee,Richard & Montero,Juan-Pablo & Bailey,Elizabeth M., 2000. "Markets for Clean Air," Cambridge Books, Cambridge University Press, number 9780521660839, Fall.
    4. Böhringer, Christoph & Rosendahl, Knut Einar, 2009. "Strategic partitioning of emission allowances under the EU Emission Trading Scheme," Resource and Energy Economics, Elsevier, vol. 31(3), pages 182-197, August.
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    7. Marc VIELLE & Laurent VIGUIER & Alain HAURIE & Alain BERNARD, "undated". "A Two-level Computable Equilibrium Model to Assess the Strategic Allocation of Emission Allowances Within the European Union," EcoMod2004 330600153, EcoMod.
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    Cited by:

    1. Böhringer, Christoph & Rosendahl, Knut Einar, 2009. "Strategic partitioning of emission allowances under the EU Emission Trading Scheme," Resource and Energy Economics, Elsevier, vol. 31(3), pages 182-197, August.

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