An important feature in the design of an emissions trading program is how emissions allowances are initially distributed into the market. In a competitive market the choice between an auction and free allocation should, according to economic theory, not have any influence on firms’ production...

A common claim in both the public and academic debate is that a tradable emission permits scheme does not provide sufficient incentives for R&D investments. The present paper addresses R&D investments and penetration rates of new technology focusing on the specific characteristics of a tradable...

New infrastructure projects may affect CO2 emissions and, thus, cost benefit analyses for these projects require a value to apply for CO2. The value may be based on the marginal social cost associated with emissions or on the shadow price resulting from present and future policies geared towards...

Over the last decades there has been an increasing focus on how to build a sustainable society and in particular on how to design policies that pushes the society into a more sustainable direction. The present paper aims at analysing differences between house buyers when valuing environmental...

This paper describes an individual choice experiment that can be used to teach students how to correctly account for opportunity costs in production decisions. Students play the role of producers who require a fuel input and an emissions permit for production. Given fixed market prices, they...

This paper addresses how to regulate greenhouse gas emissions from the transport sector when abatement costs are uncertain. In an EU context, it is shown that a combination of a cap-and-trade system and emission taxes is preferable as it minimizes the expected efficiency loss. The optimal design...

This paper takes its departure in two observations from the EU’s climate policy. First, the EU has adopted a dual approach with a trading scheme covering CO2 emissions from the energy intensive industry, while the remaining emitters are subject to emission taxes. Second, the targets are...

Transportation within the EU, as in most of the industrialized world, shows an increasing trend in CO2 emissions. This calls for measures both to decrease the amount of transportation and/or to increase the efficiency in the vehicle fleet. The present paper addresses the latter by providing a...

Today’s dominant mechanism for infrastructure project tendering is the Unit Price Contract (UPC). While the winning bidder retains risk related to the unit price bids submitted, the Principal carries all risk related to misspecification of the activities required for having a project build....