EU ETS and the new green paradox

Knut Einar Rosendahl

No 7645, CESifo Working Paper Series from CESifo

Abstract: With the new rules of the EU ETS, involving cancellation of allowances, cumulative emissions are no longer fixed but depending on the market outcome. Perino (2018) showed that additional abatement effort can reduce cumulative emissions if it occurs within a few years. This article shows that Perino’s result will be reversed, i.e., cumulative emissions increase, if the abatement effort is at a later year, or permanent. Thus, a new green paradox has emerged.

Keywords: emissions trading; green paradox; EU ETS; MSR (search for similar items in EconPapers)
JEL-codes: H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (8)

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Working Paper: EU ETS and the new green paradox (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_7645

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