Simulation of tradable CO 2 emission permits with the New Earth 21 Model

Kenji Yamaji, Katsura Sato, Yasumasa Fujii, Keigo Akimoto

International Journal of Global Energy Issues, 1998, vol. 11, issue 1/2/3/4, 23-32

Abstract: The theoretical potential of tradable CO₂ emission permits has attracted much interest as a means of achieving the efficiency and equity of CO₂ control. This paper presents a simulation of the global market of CO₂ emission permits with the New Earth 21 Model. The analysis focuses on the initial allocation of CO₂ emission permits, the effects of transaction costs and the impact of those regions out of the market. Major findings are as follows: 1) A significant amount of income transfer is realised from developed regions to developing regions with the initial allocation in proportion to each regional population; 2) As transaction costs increase, the efficiency of the market decreases; and 3) North America and China play a key role in the success of the tradable permits market. The results suggest the use of joint implementation as a realistic means of realising tradable CO₂ emission permits.

Keywords: energy model; CO 2 emission; tradable emission permit; transaction cost; joint implementation. (search for similar items in EconPapers)
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijgeni:v:11:y:1998:i:1/2/3/4:p:23-32

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