On the Effects of Linking Voluntary Cap-and-Trade Systems for CO2 Emissions

Martin Weitzman and Bjart Holtsmark

No 25001, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Linkage of cap-and-trade systems is typically advocated by economists on a general analogy with the beneficial linking of free-trade areas and on the specific grounds that linkage will ensure cost effectiveness among the linked jurisdictions. An appropriate and widely accepted specification for the damages of carbon dioxide (CO2) emissions within a relatively short (say 5-10 year) period is that marginal damages for each jurisdiction are constant (although they can differ among jurisdictions). With this defensible assumption, the analysis is significantly clarified and yields simple closed-form expressions for all CO2 permit prices. Some implications for linked and unlinked voluntary CO2 cap-and-trade systems are derived and discussed.

JEL-codes: Q50 Q52 Q54 Q58 (search for similar items in EconPapers)
Date: 2018-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
Note: EEE
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w25001.pdf (application/pdf)

Related works:
Working Paper: On the Effects of Linking Voluntary Cap-and-Trade Systems for CO2 Emissions (2018)
Working Paper: On the effects of linking voluntary cap-and-trade systems for CO2 emissions (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:25001

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25001

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().