Emissions trading can be organized in several ways. In particular, private emissions trading can be organized as permit trading, or as credit trading. The schemes have a different impact on output with credit trading leading to a higher output level than permit trading. This paper analyzes what...

This paper compares emissions trading based on an absolute cap, denoted permit trading, with a scheme based on relative standards, denoted credit trading, under both perfect and imperfect competition. I show that credit trading is an inefficient instrument and that the two schemes have a...

This paper presents a model of imperfect international competition. Within this framework, the optimal choice of national environmental policy instrument and international emissions trading scheme is discussed. The choice of national instrument is restricted to absolute and relative standards,...