A developing Asia emission trading scheme (Asia ETS)

Emanuele Massetti and Massimo Tavoni ()

Energy Economics, 2012, vol. 34, issue S3, S436-S443

Abstract: This paper provides a model assessment of the role of developing Asia in the context of climate change policies. We diagnose the potential response of Asian economies to the imposition of various climate policies, showing that if we were to equally price carbon across the world roughly half of the abatement would occur in developing Asia. We show that such autarkic measures would be consistent with the policy targets put forward by the Major Economies Forum but would not necessarily be equitable. We thus propose a fragmented cap-and-trade scheme with a specific regional market for developing Asia, the Asian Emission Trading Scheme (Asia ETS). We assess the role of the Asia ETS on the macro-economy and international transfers vis-à- vis the standard case of global trading. Our results indicate that creating two large trading markets would result in small global efficiency losses, while at the same time generating more reasonable regional incentives and transfers.

Keywords: Climate change; Developing Asia; Mitigation scenarios; Emission trading; EU-ETS; Equity (search for similar items in EconPapers)
JEL-codes: C68 Q52 Q54 Q58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:s3:p:s436-s443

DOI: 10.1016/j.eneco.2012.02.005

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