The carbon market in 2020: volumes, prices and gains from trade

Marcel Brinkman, Sam Fankhauser (), Ben Irons and Stephan Weyers

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Carbon markets are central to the global effort to reduce greenhouse gas emissions. This paper introduces a new carbon market model that aims to simulate the development of the global carbon market over the next 10-20 years. The model is based on detailed regional and sectoral marginal abatement cost data and takes an “investor perspective”. That is, it takes into account market distortions like taxes and accounts for imperfections in policy delivery. We estimate that implementing all the carbon market proposals that are currently contemplated would result in global emission reductions of 7 GtCO2 by 2020 – substantial, but well short of the mitigation effort required for a 450ppm CO2e pathway. The global carbon price would vary from €30 per tCO2 in Europe to €15 per tCO2 on the international offset market and in the new US emissions trading scheme currently under discussion.

Keywords: climate change mitigation; carbon markets; CDM; EU ETS (search for similar items in EconPapers)
JEL-codes: G15 Q54 Q58 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2009-11
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http://eprints.lse.ac.uk/37614/ Open access version. (application/pdf)

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Working Paper: The carbon market in 2020: volumes, prices and gains from trade (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:37614

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