Linking Tradable Permit Systems: A Key Element of Emerging International Climate Policy Architecture

Linkage of Tradable Permit Systems in International Climate Policy Architecture

Cap-and-trade systems have emerged as the preferred national and regional instrument for reducing emissions of greenhouse gases throughout the industrialized world, and the Clean Development Mechanism — an international emission-reduction-credit system — has developed a substantial constituency, despite some concerns about its performance. Because linkage between tradable permit systems can red...

Group Linkage of Tradable Permit Systems in International Climate Policy Architecture

Post-Durban Climate Policy Architecture Based on Linkage of Cap- and-Trade Systems

The outcome of the December 2011 United Nations climate negotiations in Durban, South Africa, provides an important new opportunity to move toward an international climate policy architecture that is capable of delivering broad international participation and significant global CO2 emissions reductions at reasonable cost. We evaluate one important component of potential climate policy architect...

Complying with the Kyoto Protocol under Uncertainty: Taxes or Tradable Permits?

The Kyoto Protocol on climate change allocates tradable quotas to developed countries, but let them free to choose the means to respect their quota. There are good reasons for a country not to control its firms through internationally tradable permits. We thus compare a tax and purely domestic tradable permits, for the European Union, the U.S and Japan. Information on abatement costs and intern...

Climate Policy with Technology Transfers and Permit Trading

In this paper, we analyze technology transfers (TT) and tradable emission rights, which are core issues of the ongoing climate negotiations. Subsidizing TT leads to the adoption of better abatement technologies in developing countries, thereby reducing the international permit price. This is beneficial for industrialized countries as long as they are permit buyers, and as long as they can targe...