Benchmark-based emission allocation in a cap-and-trade system

Heleen Groenenberg and Kornelis Blok

Climate Policy, 2002, vol. 2, issue 1, 105-109

Abstract: One of the important bottlenecks for the introduction of emission trading is how allowances should be distributed among the participants in a trading scheme. Both grandfathering on the basis of historic emissions and auctioning have important drawbacks. In this paper, we propose an allowance distribution rule based on benchmarking of production processes: each company's share in the total allowance is determined by its production level and a reference emission level per product. The scheme shows some important advantages compared to other schemes.

Date: 2002
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Citations: View citations in EconPapers (23)

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DOI: 10.3763/cpol.2002.0209

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