Application of the Carbon Emission Pricing Model in the Korean Market

Eunyoung Kim, Youngcheul Ahn and Doojin Ryu

Energy & Environment, 2014, vol. 25, issue 1, 63-78

Abstract: The international debate on carbon emission reduction to mitigate the global warming phenomenon has focused the attention of scholars and policy makers on finding rational solutions. The optimal level of carbon emission is determined by the equilibrium carbon emission price, where the marginal damage by climate change is equal to the marginal cost of carbon emission reduction. This study has been conducted because the international trade of carbon emission allowances requires the optimal carbon emission prices of each region to be estimated. By using the carbon emission pricing model of Nordhaus (1991), which considers both economic and environmental factors, this study estimates the optimal carbon emission prices in the Korean market, which is expected to play a crucial role in carbon emission pricing power regionally and internationally due to the passage of the “Act on the Allocation and Trading of Greenhouse-Gas Emission Permits†on May 2, 2012. We find that the marginal cost of carbon emission reduction generally increases with increasing sensitivity of temperature to concentrations of carbon emission and with increasing economic growth rate, but decreases with increasing real capital return.

Keywords: Carbon emission pricing; global warming; carbon emission reduction policy (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1260/0958-305X.25.1.63 (text/html)

Related works:
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:sae:engenv:v:25:y:2014:i:1:p:63-78

DOI: 10.1260/0958-305X.25.1.63

Access Statistics for this article

More articles in Energy & Environment
Bibliographic data for series maintained by SAGE Publications ().