Carbon markets in space and 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 (intertemporally) and space (geographically) from first principles, starting initially with a relatively clean slate and asking what an optimal global carbon market would look like by around 2030. Our focus is on firmlevel trading systems, although much of what we say would also apply to government-level trading (e.g., AAU trading under the Kyoto Protocol). We examine the “first principles” of design to maximise flexibility and to minimise costs, consider temporal design including banking and borrowing and other mechanisms to provide greater carbon price predictability and credibility over time, and consider spatial elements, examining the key design issues in linking national and regional carbon markets together to create a global carbon market.

JEL-codes: H23 Q41 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2009-07-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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http://eprints.lse.ac.uk/37606/ Open access version. (application/pdf)

Related works:
Working Paper: Carbon markets in space and time (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:37606

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