Industry-level emission trading between power producers in the EU

Christoph Böhringer

No 00-46, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: In this paper we investigate how restrictions for emission trading to the energy-intensive power sector will affect the magnitude and distribution of abatement costs across EU countries vis-?-vis a comprehensive EU emission trading regime. We find that emission trading between European power sectors allows the harvest of a major part of the efficiency gains provided by full trade as compared to strictly domestic action. However, trade restrictions may create a more unequal distribution of abatement costs across member states than is the case for a comprehensive trade regime. The reason for this is that restricted permit trade enhances the secondary terms-of-trade benefits to EU member countries with low marginal abatement costs at the expense of the other EU member states.

Keywords: emission trading; computable general equilibrium (search for similar items in EconPapers)
JEL-codes: D58 Q43 Q58 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:5330

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