In international emissions trading schemes such as the Kyoto Protocol and the European Union Emissions Trading Scheme, the sub- optimal negotiation of the cap with respect to total pollution minimization leads us to critically examine the proposition that generous allocation of grandfathered...

In international emissions trading schemes such as the Kyoto Protocol and the European Union Emissions Trading Scheme, the suboptimal negotiation of the cap with respect to total pollution minimization leads us to critically examine the proposition that generous allocation of grandfathered...

This paper considers a permit market with both spatial and intertemporal trading. The intertemporal market allows firms to freely borrow or bank permits over a pre-specified period of time. When this period is over, the permit bank has to be balanced, so firms cannot avoid compliance just by...

This article critically examines the EU ETS intertemporal market during its Phase I (2005-2007). We test the Hotelling rule as a key element of a competitive equilibrium to validate whether allowance prices rise at the same rate as the interest rate. Including readily observable characteristics...

Agricultural expansion is the main deforestation driver, while forest degradation is due to non-sustainable poaching and harvesting of forest products. Policies to reduce emissions from deforestation and forest degradation (REDD) thus focus on agricultural expansion and illegal harvesting. The...

The article develops R.H.Coase's insight that the level of transaction costs in the market determines the amount of externalities, thus providing arguments against government intervention. Contrary to Coase, however, we argue that the level of transaction costs cannot be considered as given, and...

The Stern Review constitutes today the most complete and didactic synthesis of the economics of climate change. Despite appearances, it is not, however, a simple reference manual. Its most attractive feature is the author’s commitment to action in the face of climactic risk. The report’s...

We investigate the relative efficiency of an agreement based on a uniform standard without transfers and one based on differentiated standards with transfers when strictly identical countries deal with transboundary pollution. We especially ask what role fixed cost plays. Two approaches are...