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Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System

Robert Stavins

No 2008.67, Working Papers from Fondazione Eni Enrico Mattei

Abstract: There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an up- stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO2 greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 percent over 25 years. The system provides for linkage with emission reduction credit projects in other countries, harmonization over time with effective cap-and-trade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products.

Keywords: Cap-and-Trade System; Carbon Dioxide; Greenhouse Gas Emissions; Global Climate Change; Carbon Taxes (search for similar items in EconPapers)
JEL-codes: Q28 Q38 Q48 Q54 Q58 (search for similar items in EconPapers)
Date: 2008-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
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Journal Article: Addressing climate change with a comprehensive US cap-and-trade system (2008) Downloads
Working Paper: Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System (2008) Downloads
Working Paper: Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System (2007) Downloads
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