We examine the potential effects on permit prices and abatement costs of four compliance rules governing emissions trade across sources and periods in the Kyoto Protocol: The banking rule that allows excess permits to be used later; the restoration rate rule that penalizes borrowing; the commitment period reserve rule that limits sales; and finally, the suspension rule that restricts borrowing and sales. Our framework is a two-period model where parties may be out of compliance in the Kyoto period, but are assumed to comply at a later time. Under varying assumptions about market power and US participation, we find that the rules may have pronounced effects on individual costs, but overall efficiency is not severely affected. © 2006 Elsevier Inc. All rights reserved.
CITATION STYLE
Godal, O., & Klaassen, G. (2006). Carbon trading across sources and periods constrained by the Marrakesh Accords. Journal of Environmental Economics and Management, 51(3), 308–322. https://doi.org/10.1016/j.jeem.2005.07.003
Mendeley helps you to discover research relevant for your work.