Carbon Emission Trading Scheme and the Aviation Sector: An experimental analysis on allocation of allowances
Anthony Chin and
Zhang Peng ()
Additional contact information
Zhang Peng: Department of Economics, National University of Singapore
SCAPE Policy Research Working Paper Series from National University of Singapore, Department of Economics, SCAPE
The European Union has proposed a Directive to include aviation activities in the Emission Trading Scheme (ETS) in 2012. The allowance allocation method which will be put in place is relatively easy to implement with low administration cost. However, careful scrutiny suggests that the allocation method does not favor airlines with high energy efficiency. This study proposes an alternative allowance allocation method which is fairer in that it rewards energy efficient airlines. Further, the new method is easy to implement with low administrative cost. The Cournot model serves as the theoretical foundation upon which the experiments are designed to simulate the aviation industry under the ETS. The equilibrium is calculated for each allowance allocation method. Results from experiments suggest consistency with theoretical outcomes.
Pages: 33 pages
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-eur, nep-exp and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sca:scaewp:1002
Access Statistics for this paper
More papers in SCAPE Policy Research Working Paper Series from National University of Singapore, Department of Economics, SCAPE Contact information at EDIRC.
Bibliographic data for series maintained by (). This e-mail address is bad, please contact .