Price floors for emissions trading

Peter Wood and Frank Jotzo

Energy Policy, 2011, vol. 39, issue 3, 1746-1753

Abstract: Price floors in greenhouse gas emissions trading schemes can guarantee minimum abatement efforts if prices are lower than expected, and they can help manage cost uncertainty, possibly as complements to price ceilings. Provisions for price floors are found in several recent legislative proposals for emissions trading. Implementation however has potential pitfalls. Possible mechanisms are government commitments to buy back permits, a reserve price at auction, or an extra fee or tax on acquittal of emissions permits. Our analysis of these alternatives shows that the fee approach has budgetary advantages and is more compatible with international permit trading than the alternatives. It can also be used to implement more general hybrid approaches to emissions pricing.

Keywords: Price; floor; Hybrid; emissions; pricing; Emissions; trading (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (74)

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Related works:
Working Paper: Price Floors for Emissions Trading (2009)
Working Paper: Price Floors for Emissions Trading (2009)
Working Paper: Price Floors for Emissions Trading (2009)
Working Paper: Price Floors for Emissions Trading (2009)
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