EconPapers    
Economics at your fingertips  
 

Output and Abatement Effects of Allocation Readjustment in Permit Trade

Adrian Muller () and Thomas Sterner

No 413, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: In permit trading systems, free initial allocation is common practice. A recent example is the European Union Greenhouse Gas Emission Trading Scheme (EU-ETS). We investigate effects of different free allocation schemes on incentives and identify significant perverse effects on abatement and output employing a simple multi-period model. Firms have incentives for strategic action if allocation in one period depends on their actions in previous ones and thus can be influenced by them. These findings play a major role where trading schemes become increasingly popular as environmental or resource use policy instruments. This is of particular relevance in the EU-ETS, where the current period is a trial-period before the first commitment period of the Kyoto protocol. Finally, this paper fills a gap in the literature by establishing a consistent terminology for initial allocation.

Keywords: - (search for similar items in EconPapers)
JEL-codes: D62 D78 Q50 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec, nep-ene and nep-env
Date: 2009-12-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/2077/21519 (text/html)
Our link check indicates that this URL is bad, the error code is: 503 Service Temporarily Unavailable (http://hdl.handle.net/2077/21519 [302 Found]--> https://gupea.ub.gu.se/handle/2077/21519)

Related works:
Working Paper: Output and Abatement Effects of Allocation Readjustment in Permit Trade (2006) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:gunwpe:0413

Ordering information: This working paper can be ordered from

Access Statistics for this paper

More papers in Working Papers in Economics from University of Gothenburg, Department of Economics Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Ann-Christin Räätäri Nyström ().

 
Page updated 2019-11-13
Handle: RePEc:hhs:gunwpe:0413