IDEAS home Printed from https://ideas.repec.org/p/ube/dpvwib/dp0301.html

Does Distribution Matter? When Flexibility, Equity and Efficiency in Greenhouse Gas Abatement

Author

Listed:
  • Gunter Stephan
  • Georg M ller-F rstenberger

Abstract

This paper analyses banking and borrowing of carbon emission rights within the framework of a simple, integrated assessment model. Breaking the world economy in just two regions it will be shown: (1) Increasing when-flexibility in greenhouse gas abatement through banking and borrowing of carbon emission permits has a positive effect on welfare for regions with a poor endowment in carbon emission rights, but negatively affects rich-endowed regions. (2) Intergenerational fairness advocates intertemporal flexibility in greenhouse gas abatement, irrespectively of the initial allocation of carbon rights. (3) Optimal carbon accumulation is not independent of the initial allocation of carbon rights. Different initial sharing rules clearly influence the development of atmospheric carbon concentration.

Suggested Citation

  • Gunter Stephan & Georg M ller-F rstenberger, 2003. "Does Distribution Matter? When Flexibility, Equity and Efficiency in Greenhouse Gas Abatement," Diskussionsschriften dp0301, Universitaet Bern, Departement Volkswirtschaft.
    • Handle: RePEc:ube:dpvwib:dp0301
    as

    Download full text from publisher

    File URL: https://repec.vwiit.ch/dp/dp0301.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. McKibbin, Warwick J. & Shackleton, Robert & Wilcoxen, Peter J., 1999. "What to expect from an international system of tradable permits for carbon emissions," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 319-346, August.
    2. Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
    3. Victor Ginsburgh & Michiel Keyzer, 2002. "The Structure of Applied General Equilibrium Models," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262571579, December.
    4. repec:aen:journl:1995v16-04-a01 is not listed on IDEAS
    5. Kling, Catherine & Rubin, Jonathan, 1997. "Bankable permits for the control of environmental pollution," Journal of Public Economics, Elsevier, vol. 64(1), pages 101-115, April.
    6. Copeland, Brian R. & Taylor, M. Scott, 2005. "Free trade and global warming: a trade theory view of the Kyoto protocol," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 205-234, March.
    7. Biglaiser, Gary & Horowitz, John K & Quiggin, John, 1995. "Dynamic Pollution Regulation," Journal of Regulatory Economics, Springer, vol. 8(1), pages 33-44, July.
    8. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-765, September.
    9. Manne, Alan S. & Stephan, Gunter, 1999. "Climate-change policies and international rate-of-return differentials," Energy Policy, Elsevier, vol. 27(6), pages 309-316, June.
    10. Paul Leiby & Jonathan Rubin, 2001. "Intertemporal Permit Trading for the Control of Greenhouse Gas Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(3), pages 229-256, July.
    11. repec:aen:journl:1992v13-01-a04 is not listed on IDEAS
    12. Chichilnisky, Graciela & Heal, Geoffrey, 1994. "Who should abate carbon emissions? : An international viewpoint," Economics Letters, Elsevier, vol. 44(4), pages 443-449, April.
    13. repec:bla:kyklos:v:51:y:1998:i:3:p:321-38 is not listed on IDEAS
    14. repec:aen:journl:1994v15-02-a11 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gunter Stephan & Georg Müller-Fürstenberger, 2004. "Does Distribution Matter? Efficiency, Equity and Flexibility in Greenhouse Gas Abatement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 27(1), pages 87-107, January.
    2. Manne, Alan S. & Stephan, Gunter, 2005. "Global climate change and the equity–efficiency puzzle," Energy, Elsevier, vol. 30(14), pages 2525-2536.
    3. Georg Müller-Fürstenberg & Gunter Stephan, 2002. "Where-to-Abate' And 'Where-to-Invest' Flexibility - An Integrated Assessment Analysis of Climate Change," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 138(II), pages 191-213, June.
    4. Pan, Xunzhang & Teng, Fei & Wang, Gehua, 2014. "A comparison of carbon allocation schemes: On the equity-efficiency tradeoff," Energy, Elsevier, vol. 74(C), pages 222-229.
    5. Gunter Stephan & Georg M ller-F rstenberger, 2000. "Where-to-Abate and Where-to-Invest Flexibility: An Integrated Assessment Analysis of Climate Change," Diskussionsschriften dp0001, Universitaet Bern, Departement Volkswirtschaft.
    6. Marian Leimbach & Baumstark, Lavinia, 2011. "Intertemporal trade and the Integrated Assessment of climate change mitigation policies," EcoMod2011 3036, EcoMod.
    7. Georg M ller-F rstenberger & Gunter Stephan, 1999. "Banking and Trade of Carbon Emission Rights: A CGE Analysis," Diskussionsschriften dp9906, Universitaet Bern, Departement Volkswirtschaft.
    8. Marian Leimbach & Anselm Schultes & Lavinia Baumstark & Anastasis Giannousakis & Gunnar Luderer, 2017. "Solution algorithms for regional interactions in large-scale integrated assessment models of climate change," Annals of Operations Research, Springer, vol. 255(1), pages 29-45, August.
    9. Makoto Hasegawa & Stephen Salant, 2015. "The Dynamics of Pollution Permits," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 61-79, October.
    10. Chen, W.T. & Li, Y.P. & Huang, G.H. & Chen, X. & Li, Y.F., 2010. "A two-stage inexact-stochastic programming model for planning carbon dioxide emission trading under uncertainty," Applied Energy, Elsevier, vol. 87(3), pages 1033-1047, March.
    11. Leimbach, Marian & Baumstark, Lavinia, 2010. "The impact of capital trade and technological spillovers on climate policies," Ecological Economics, Elsevier, vol. 69(12), pages 2341-2355, October.
    12. Paul Leiby & Jonathan Rubin, 2001. "Intertemporal Permit Trading for the Control of Greenhouse Gas Emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 19(3), pages 229-256, July.
    13. Chevallier, Julien & Etner, Johanna & Jouvet, Pierre-André, 2011. "Bankable emission permits under uncertainty and optimal risk-management rules," Research in Economics, Elsevier, vol. 65(4), pages 332-339, December.
    14. Richard Newell & William Pizer & Jiangfeng Zhang, 2005. "Managing Permit Markets to Stabilize Prices," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 31(2), pages 133-157, June.
    15. Julien Chevallier & Benoît Sévi, 2014. "On the Stochastic Properties of Carbon Futures Prices," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(1), pages 127-153, May.
    16. Zhu, Yongbin & Shi, Yajuan & Wang, Zheng, 2014. "How much CO2 emissions will be reduced through industrial structure change if China focuses on domestic rather than international welfare?," Energy, Elsevier, vol. 72(C), pages 168-179.
    17. Tarui, Nori, 2002. "Intertemporal Permit Trading For Stock Pollutants With Uncertainty," Working Papers 14431, University of Minnesota, Center for International Food and Agricultural Policy.
    18. Kornek, Ulrike & Klenert, David & Edenhofer, Ottmar & Fleurbaey, Marc, 2021. "The social cost of carbon and inequality: When local redistribution shapes global carbon prices," Journal of Environmental Economics and Management, Elsevier, vol. 107(C).
    19. Bhadury, Soumya & Pratap, Bhanu & Gajbhiye, Dhirendra, 2025. "Transition to a greener economy: Climate change risks and resilience in a state-space framework," Journal of Asian Economics, Elsevier, vol. 98(C).
    20. Zhu, Xueqin & van Ierland, Ekko, 2006. "The enlargement of the European Union: Effects on trade and emissions of greenhouse gases," Ecological Economics, Elsevier, vol. 57(1), pages 1-14, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • F2 - International Economics - - International Factor Movements and International Business

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ube:dpvwib:dp0301. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Franz Koelliker (email available below). General contact details of provider: https://edirc.repec.org/data/vwibech.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.