Hot Air as an Implicit Side Payment Arrangement: Could a Hot Air Provision have Saved the Kyoto-Agreement?
The purpose of this paper is to analyse whether the presence of Hot Air trading jeopardizes the environmental target of an international environmental agree-ment. We argue that Hot Air can be used as an implicit side-payment mecha-nism to actually bring about higher environmental protection compared to the situation without the trade option. We point to the existence of a fundamental trade-off between costs of compliance and the creation of dynamic incentives to develop cheaper reduction technologies. Implicit side-payments, in terms of Hot Air provision, may be needed in order to establish a compromise between these opposing demands. We identify the shortcomings and benefits of allowing fully flexible permit trading including the allocation rule of grandfathering.
|Date of creation:||Jul 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Niels Bohrs Vej 9, 6700 Esbjerg|
Phone: (+45) 6550 1000
Fax: (+45) 6550 1091
Web page: http://www.sam.sdu.dk/ime
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Scott Barret, 1998. "On the Theory and Diplomacy of Environmental Treaty-Making," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 317-333, April.
- Gusbin, Dominique & Klaassen, Ger & Kouvaritakis, Nikos, 1999. "Costs of a ceiling on Kyoto flexibility," Energy Policy, Elsevier, vol. 27(14), pages 833-844, December.
- ZhongXiang Zhang, 2000.
"Estimating the size of the potential market for the Kyoto flexibility mechanisms,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(3), pages 491-521, 09.
- Zhang, Zhong Xiang, 1999. "Estimating the size of the potential market for the Kyoto flexibility mechanisms," CCSO Working Papers 199920, University of Groningen, CCSO Centre for Economic Research.
- Urs Steiner Brandt & Gert Tinggaard Svendsen, 2001. "Hot air in Kyoto, cold air in The Hague," Working Papers 22/01, University of Southern Denmark, Department of Environmental and Business Economics.
- Carraro, Carlo & Siniscalco, Domenico, 1992. "The international dimension of environmental policy," European Economic Review, Elsevier, vol. 36(2-3), pages 379-387, April.
- Stavins, Robert, 2001.
"Lessons From the American Experiment With Market-Based Environmental Policies,"
dp-01-53, Resources For the Future.
- Stavins, Robert, 2001. "Lessons from the American Experiment with Market-Based Environmental Policies," Working Paper Series rwp01-032, Harvard University, John F. Kennedy School of Government.
- Barrett, Scott, 1997. "The strategy of trade sanctions in international environmental agreements," Resource and Energy Economics, Elsevier, vol. 19(4), pages 345-361, November.
- Brandt, Urs Steiner & Svendsen, Gert Tinggaard, 2002. "Hot air in Kyoto, cold air in The Hague--the failure of global climate negotiations," Energy Policy, Elsevier, vol. 30(13), pages 1191-1199, October.
- Grubler, Arnulf & Nakicenovic, Nebojsa & Victor, David G., 1999. "Dynamics of energy technologies and global change," Energy Policy, Elsevier, vol. 27(5), pages 247-280, May.
- Barrett, Scott, 1998. "Political Economy of the Kyoto Protocol," Oxford Review of Economic Policy, Oxford University Press, vol. 14(4), pages 20-39, Winter.
- Chen, Wenying, 2003. "Carbon quota price and CDM potentials after Marrakesh," Energy Policy, Elsevier, vol. 31(8), pages 709-719, June.
- Springer, Urs, 2003. "The market for tradable GHG permits under the Kyoto Protocol: a survey of model studies," Energy Economics, Elsevier, vol. 25(5), pages 527-551, September.
When requesting a correction, please mention this item's handle: RePEc:sdk:wpaper:42. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ulla H. Oehlenschläger)
If references are entirely missing, you can add them using this form.