We study optimal climate policy for a "policy bloc" of countries facing a market where emissions offsets can be purchased from a non-policy “fringe” of countries (such as for the CDM). Policy-bloc firms benefit from free quota allocations whose quantity is updated according to firms' past...

The Chinese central government has approved the seven pilot carbon trading schemes. These seven pilot regions are deliberately selected to be at varying stages of development and are given considerable leeway to design their own schemes. These pilot trading schemes have features in common, but...

Putting a price on carbon is considered a crucial step for China's endeavor of harnessing the market forces to reduce its energy consumption and carbon emissions. Indeed, aligned with China's grand experiment with low-carbon provinces and low-carbon cities in six provinces and thirty-six cities,...

Transportation is one of the main contributors to greenhouse gas emissions. Climate regulations on transportation are often a mix of sector-specific regulations and economy-wide measures (such as emission pricing). In this paper we analyse the effects on economic welfare, abatement costs and...

This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO₂) emissions is in their own national interests due to domestic co-benefits. On average, nationally efficient prices are substantial, $57.5 per ton of CO₂ (for year 2010), reflecting primarily...

This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits(leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of...

We develop a 2-period emission trading model for a stock pollutant with demand shocks resolving over time. We find precise conditions for efficiency of a stabilization mechanism where cumulative available permits decrease with excess supply in early periods. Our model describes the stabilization...

Carbon taxes and emissions trading systems (ETSs) to limit emissions of greenhouse gases (GHGs) are becoming increasingly common. At the end of 2015, 17 GHG ETSs were operational in 55 jurisdictions while 18 jurisdictions collected a carbon tax. Empirical evidence on the performance of carbon...

This paper examines the effects of firm-level innovation in carbon-abatement technologies on optimal cap-and-trade schemes with and without price controls. We characterize optimal cap-and-trade regulation with a price cap and price floor, and compare it to the individual cases of pure taxation...

This paper is a quasi-replication of Andersson (2019). I use the synthetic control method to estimate the effect of a carbon tax starting at $1.41 per tonne of CO2 and increased through successive reforms to $20 by 2011. The results show that, one year after the intervention, the tax reduced CO2...