Linking permit markets multilaterally

Doda, Baran; Quemin, Simon; Taschini, Luca

doi:10.1016/j.jeem.2019.102259

Cited by 31 publications

(14 citation statements)

References 68 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…We know from economic theory that for the coalition as a whole the abatement cost unambiguously declines as more flexibility is introduced. However, Pareto improvement is not necessarily obtained: some members of the coalition might lose unless redistribution transfers are allowed (Carbone et al, 2009;Doda et al, 2019). In this case the conclusion is, thus, less obvious for the small, open partner.…”

Section: Theoretical Illustrationmentioning

confidence: 97%

“…Many previous articles have studied EU's ETS and non-ETS targets and flexibility (e.g., Tol, 2009;Böhringer, 2014;Aune and Golombek, 2020;Veille, 2020), and a literature strand has looked into linking regional allowance trading systems (e.g., Anger, 2008;Carbone et al, 2009;Flachsland et al, 2011, Mehling et al, 2018, Doda et al, 2019Holtsmark and Weitzman, 2020). This paper assumes the perspective of the small, open Norwegian economy and asks whether it is worthwhile and feasible to join the larger EU coalition.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Emission targets and coalition options for a small, ambitious country: An analysis of welfare costs and distributional impacts for Norway

Fæhn

Yonezawa

2021

Energy Economics

View full text Add to dashboard Cite

We theoretically and numerically analyse the impacts for a small, open country with carbon abatement ambitions of joining a coalition with allowance trading. Besides welfare impacts for both the coalition and the small, open economy joining the coalition, we scrutinise how the studied policy options differ with respect to their distributional impacts across domestic income groups. Our example is the EU 2030 policies and Norway's linking to it. In spite of theoretical ambiguity, the findings suggest that the tighter the links with the EU, the lower the abatement costs for Norway. The distributional profile of the welfare costs tends to be progressive, i.e., the relative (and absolute) incidence of the carbon policy falls more heavily on wealthy households than poor households, regardless of the choice of linking options. However, the less progressive, the lower the overall welfare cost. This indicates a trade-off between efficiency and distribution concerns. A national capand-trade system without linking to the EU is the least cost-effective option for Norway but also the most progressive as the higher income deciles face lower capital return and wages.

show abstract

Section: Theoretical Illustrationmentioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

Emission targets and coalition options for a small, ambitious country: An analysis of welfare costs and distributional impacts for Norway

Fæhn

Yonezawa

2021

Energy Economics

View full text Add to dashboard Cite

show abstract

“…Using a CGE model, Gavard et al (2016) show that the limited trading of emissions permits between developed and developing countries or regions can be beneficial for all regions. Doda et al (2019) quantify the efficiency gains from linking which accrue to an individual jurisdiction participating in an arbitrary linkage group. They also identify two independent sources of efficiency gains, namely effort-and risk-sharing gains.…”

Section: Literaturementioning

confidence: 99%

The political economy of negotiating international carbon markets

Arvaniti

Habla

2021

Journal of Environmental Economics and Management

View full text Add to dashboard Cite

International carbon markets are frequently propagated as an efficient instrument for reducing CO 2 emissions. We argue that such markets, despite their desirable efficiency properties, might not be in the best interest of governments who are guided by strategic considerations in negotiations. We identify the circumstances under which governments benefit or are harmed by cooperation in the form of an international market. Our results challenge the conventional wisdom that an international market is most beneficial for participating countries when they have vastly diverging marginal abatement costs; rather, it may be more promising to negotiate agreements with non-tradable emissions caps.

show abstract