Designing carbon markets, part I: carbon markets in time

Sam Fankhauser () and Cameron Hepburn ()

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper analyses the design of carbon markets in time (i.e., intertemporally). It is part of a twin set of papers that ask, starting from first principles, what an optimal global carbon market would look like by around 2030. Our focus is on firm-level cap-and-trade systems, although much of what we say would also apply to government-level trading and carbon offset schemes. We examine the "first principles" of temporal design that would help to maximise flexibility and to minimise costs, including banking and borrowing and other mechanisms to provide greater carbon price predictability and credibility over time.

Keywords: climate policy; uncertainty; emissions; prices; quantities; ISI (search for similar items in EconPapers)
JEL-codes: F3 G3 J1 N0 (search for similar items in EconPapers)
Date: 2010-08
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Citations: View citations in EconPapers (42)

Published in Energy Policy, August, 2010, 38(8), pp. 4363-4370. ISSN: 0301-4215

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http://eprints.lse.ac.uk/28832/ Open access version. (application/pdf)

Related works:
Journal Article: Designing carbon markets. Part I: Carbon markets in time (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:28832

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