This paper considers the question under what conditions domestic markets of emission permits would and should merge to become an international market. Emission permits are licenses, and so governments would need to recognize other countries' permits. In a two-county model, we find that it is in...

This paper considers the question under what conditions domestic markets of emission permits would and should merge to become an international market. Emission permits are licenses, and so governments would need to recognize other countries' permits. In a two-county model, we find that it is in...

In a model inspired by the EU Emissions Trading Scheme, non-cooperative countries allocate their emissions to internationally trading and non-trading sectors. Each country is better off with trading than without, and aggregate welfare is maximized with all sectors in the trading scheme. We...

This paper examines the Regional Clean Air Incentives Market (RECLAIM) which was launched in Los Angeles in January 1994. RECLAIM is an emissions trading program which is expected to decrease hazardous pollutants from stationary sources in the South Coast Basin. I analyze the transactions data...

In this paper, we use the two region CETA-M model to explore some related issues raised by the current interest in CO2 concentration targets as a possible climate change policy objective. First, we identify possible cost and benefit assumptions that would make particular concentration ceilings...

Experimental methods have recently been used to evaluate environmental policy instruments, in particular – and most suitably, it seems – emissions trading programs of various designs. Some studies have focused on domestic emissions trading programs, while others have focused on international...

This paper models strategic behavior in the market for sulfur dioxide emissions allowances. Firms are monopolies in their respective output markets and strategic players in the input market for allowances. A competitive allowance market provides the benchmark setting, and in this case, any...

This paper suggests that a mixture of measures may be needed to encourage renewable energy under the Kyoto Protocol. It explains that the goal of maximizing short term cost effectiveness tends to conflict with the goal of encouraging the long-term technological development that the world will...

After greenhouse gas emission trading on country level had been proposed by the Kyoto Protocol agreed on in 1997, a discussion on the introduction of national schemes with entities as participants ensued. This discussion also raised the question if and how such systems can be linked. We first...

The Kyoto protocol shows that countries have an incentive to change their emission ceilings when international emissions trading becomes possible. This paper analyzes in a very general model how countries will change their ceilings and the consequent effects on total emissions and welfare. We...