Auctioning greenhouse gas emissions permits in Australia

Regina Betz, Stefan Seifert, Peter Cramton and Suzi Kerr
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Stefan Seifert: University of Karlsruhe, Germany

Environmental Economics Research Hub Research Reports from Environmental Economics Research Hub, Crawford School of Public Policy, The Australian National University

Abstract: Allocating permits based on individual historical emissions (‘grandfathering’), or industry benchmark data, is an important design aspect of an emissions trading scheme. Free permit allocation has proven complex and inefficient (particularly in the European Union) with distribution implications also politically difficult to justify. For these reasons, auctioning emissions permits has become more popular than allocating permits. The European Union is now moving towards auctioning more than 50 per cent of all permits in 2013. In the US, the Regional Greenhouse Gas Initiative (RGGI) has started with auctioning 100 per cent of permits. The Australian proposal for a Carbon Pollution Reduction Scheme (CPRS) also provides for auctioning a significant share of total permits. This report discusses important theoretical and practical auction design aspects for allocating emissions permits in Australia. Particularly interesting is the proposal to simultaneously auction multiple emissions units of different vintages. The specific design details proposed have been adopted by the Australian Government in their CPRS White Paper.

Keywords: Climate policy; Greenhouse gases; Auctions; Emissions trading (search for similar items in EconPapers)
Date: 2009-05
New Economics Papers: this item is included in nep-ene and nep-env
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Auctioning greenhouse gas emissions permits in Australia (2010)
Journal Article: Auctioning greenhouse gas emissions permits in Australia * (2010)
Working Paper: Auctioning Greenhouse Gas Emissions Permits in Australia (2009)
Working Paper: Auctioning Greenhouse Gas Emissions Permits in Australia (2009)
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