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Emission Trading Scheme in the Maritime Industry: An experimental analysis


  • Anthony Theng Heng Chin

    () (Department of Economics, National University of Singapore)


The International Maritime Organization has proposed the implementation of a carbon dioxide emission trading scheme for the industry. Two problems associated with this is that of high noncompliance rate and the need to reconcile the both IMO and UNFCCC principles. This study reports a laboratory experiment to examine two design features of the potential scheme that are related to the problems identified. Our experimental parameters approximate the possible allocation method and other features of the maritime industry. Two key findings from this study are, (1) Implementation of the dynamic enforcement model reduces both permit noncompliance and report noncompliance relative to the static enforcement model and (2) The initial allocation of permits, which provides a solution to reconcile the two conflicting principle, impacts on the efficiency of the scheme.The International Maritime Organization has proposed the implementation of a carbon

Suggested Citation

  • Anthony Theng Heng Chin, 2011. "Emission Trading Scheme in the Maritime Industry: An experimental analysis," SCAPE Policy Research Working Paper Series 1101, National University of Singapore, Department of Economics, SCAPE.
  • Handle: RePEc:sca:scaewp:1101

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    References listed on IDEAS

    1. Cason, Timothy N., 2010. "What Can Laboratory Experiments Teach Us About Emissions Permit Market Design?," Agricultural and Resource Economics Review, Cambridge University Press, vol. 39(2), pages 151-161, April.
    2. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
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