The market mechanisms built into the Kyoto Protocol have the potential of significantly reducing the costs of meeting the aggregate emission target. But if trading proceeds on a project-by-project basis rather than on a frictionless market, the total cost saving potential of trading is unclear....

The market mechanisms built into the Kyoto Protocol have the potential of significantly reducing costs of limiting greenhouse gases. But if trading proceeds on a bilateral project-by-project basis rather than on a frictionless market, the total cost saving potential of trading is unclear. This...

Emissions trading in climate change can entail large overall cost savings and transfers between developed and developing countries. However, the search for acceptable JI or CDM projects implies a deviation from the perfect market framework used in previous estimations. Our model combines the...