A fuzzy methodology for evaluating a market of tradable CO 2-permits

Abstract

When developing a market of tradable CO2-permits for achieving emission reductions, many badly known aspects must be accounted for. There are the landmarks to be imposed to the industry, the realistic schedules for their achievement, the potentials of different reduction technologies, the annual budgets that can be spent and last but not least the marginal pollution-abatement costs. In this methodological paper a simulation technique is developed to provide insight to public policy-makers into this complex matter. We propose to use fuzzy reasoning techniques to reconcile the diverging opinions of experts and to take into account the many uncertainties on marginal abatement costs. © 2005 Springer Science+Business Media, Inc.