Carbon Pricing: Transaction Costs of Emissions Trading vs. Carbon Taxes

Coria, Jessica; Jaraitė, Jūratė

doi:10.2139/ssrn.2573689

Cited by 14 publications

(10 citation statements)

References 15 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Governance should include improvement of the operation of the market, such as reducing transaction costs ( [26], but see [27], for a different view), especially for sequestration projects [28,29].…”

Section: Governance and Enforcementmentioning

confidence: 99%

A price on warming with a supply chain directed market

Raffensperger

2021

Discov Sustain

View full text Add to dashboard Cite

Existing emissions trading system (ETS) designs inhibit emissions but do not constrain warming to any fixed level, preventing certainty of the global path of warming. Instead, they have the indirect objective of reducing emissions. They provide poor future price information. And they have high transaction costs for implementation, requiring treaties and laws. To address these shortcomings, this paper proposes a novel double-sided auction mechanism of emissions permits and sequestration contracts tied to temperature. This mechanism constrains warming for many (e.g., 150) years into the future and every auction would provide price information for this time range. In addition, this paper proposes a set of market rules and a bottom-up implementation path. A coalition of businesses begin implementation with jurisdictions joining as they are ready. The combination of the selected market rules and the proposed implementation path appear to incentivize participation. This design appears to be closer to “first best” with a lower cost of mitigation than any in the literature, while increasing the certainty of avoiding catastrophic warming. This design should also have a faster pathway to implementation. A numerical simulation shows surprising results, e.g., that static prices are wrong, prices should evolve over time in a way that contradicts other recent proposals, and “global warming potential” as used in existing ETSs are generally erroneous.

show abstract

Section: Governance and Enforcementmentioning

confidence: 99%

A price on warming with a supply chain directed market

Raffensperger

2021

Discov Sustain

View full text Add to dashboard Cite

show abstract

“…Alpay et al (2002) found that environmental regulation had a negative impact on the productivity of the U.S. food processing industry from 1971 to 1994 but had a positive impact on the productivity of the Mexican food processing industry during the same period. Coria and Jaraite (2015) found that CO 2 emission policies had no significant impact on the production behavior and economic benefits of Swedish enterprises.…”

Section: Literature Reviewmentioning

confidence: 91%

Impact of Environmental Protection Regulations on Corporate Performance From Porter Hypothesis Perspective: A Study Based on Publicly Listed Manufacturing Firms Data

Wang

Mohiuddin

2022

Front. Environ. Sci.

View full text Add to dashboard Cite

“Porter Hypothesis” believes that environmental protection regulations contribute to cleaner production and green technology innovation which benefit to enhance manufacturing firm performance . We take China’s new “Environmental Protection Regulations (2015), as a quasi-natural experiment, using A-share listed companies in Shenzhen and Shanghai in 2012–2017 as a research sample. Using the propensity score matching and double difference (PSM-DID) method, we empirically test the impact of environmental regulations on the financial performance of these companies. The results show that the new Environmental Protection Law has significantly improved corporate profits of large enterprises large firms. Different from the innovation mechanism emphasized in the literature based on the Porter hypothesis, we find that “Compliance cost heterogeneity” caused by the scale difference of firms better explains the impact of environmental regulations on the profit margin of listed manufacturing firms. Overall, this study contributes novel insights about the economic consequences of environmental regulation and establishes an initial foundation for investigating environmental regulation from the perspective of compliance cost heterogeneity.

show abstract

“…The cap system then would come close to the emission tax in pricing though not yet in its administrative set-up. The full step towards the administratively simplified emission tax would reduce transaction costs also privately, see (Coria and Jaraitė 2015). The four options for emission pricing, No Pricing; Pure Cap; Hybrid Cap; and Emission Tax, are starting point for the bottom up development of instrument mixes per sector in the next Chapter.…”

Section: Price Stabilized Cap-and-tradementioning

confidence: 99%