Taking account of sinks credits as agreed in Bonn and Marrakech, this paper illustrates how market power could be exerted in the absence of the US ratification under Annex 1 trading and explores the potential implications of non-competitive supply behavior for the international market of...

After Bonn and Marrakech it is likely that emission trading will be realized in the near future. Major influences on the permit market are the institutional details, the participation structure and the treatment of hot air. Different scenarios do not only differ in their implications for the...

In discussions about the policy design of domestic emission trading, e.g., when implementing the <p> Kyoto Protocol, the two permit allocation alternatives ­ auctioning and allocation gratis <p> (grandfathering) ­ are often pitted against each other as representing utopian cost-effectiveness and <p>...</p></p></p>

Although market power in permit markets has been examined in some detail following the seminal work of Hahn (1984), the effect of free allocation on price manipulation with market power in both output and permit market has not specifically been addressed. I show that in this case, the threshold...