The Market for Tradable GHG Permits Under the Kyoto Protocol : A Survey of Model Studies

This paper gathers results from 25 models of the market for tradable greenhouse gas (GHG) emission permits under the Kyoto Protocol. Due to diverging projections of emissions growth and different modeling approaches, the model results differ substantially. The average market volume is approximately 17 and 33 billion USD under global trading and Annex B trading, respectively. Including non-carbon GHG lowers compliance costs and permit prices. In the absence of the United States, permit demand roughly equals 'hot air' from the Former Soviet Union. These countries can increase their revenues from selling permits by restricting supply, which raises the permit price