The theoretical justiÖcation for a greenhouse gas (GHG) cap and trade system is that participants will trade emission permits until their marginal cost of abatement equals the equilibrium price of emission permits. However, for Öscally constrained governments this logic does not apply, as they...

The theoretical justification for a greenhouse gas (GHG) cap and trade system is that participants will trade emission permits until their marginal costs of abatement equal the equilibrium price of emission permits. Abatement is then globally cost efficient. We demonstrate, however, that when...

The theoretical justification for a greenhouse gas (GHG) cap and trade system is that participants will trade emission permits until their marginal costs of abatement equal the equilibrium price of emission permits. Abatement is then globally cost efficient. We demonstrate, however, that when...