This paper compares internationally-tradeable permits with a uniform carbon price, as seen through the lens of an individual country. To ensure a level playing field, these two approaches are initially calibrated to be welfare-equivalent for the country in a deterministic setting. While both price and quantity instruments have identical consequences under perfect certainty, outcomes differ subs...

The social cost of carbon is the expected present value damages from emitting one ton today. We use perturbation theory to derive an approximate tractable expression for this adjusted climatic and economic risk. allow different aversion risk intertemporal fluctuations, skewness dynamics in distributions climate sensitivity damage ratio, correlated shocks. identify prudence, insurance, exposure ...

The economic costs of climate change can be large, or perhaps non-existent. We cannot tell before experiencing climate change, and thus the social cost of carbon is partly based on subjective beliefs. We take a dataset of estimates for the carbon price as a representation of beliefs, and develop a tractable stochastic climate-economy model that replicates the distribution of estimates. We use t...

In this paper, which forms a chapter in the forthcoming Book “Delivering a Low Carbon Electricity System: Technologies, Economics and Policy”, Grubb and Newbery examine how carbon for electricity generation should be priced. They begin by suggesting that it is not clear what the correct price of carbon is, but that it spans the whole range of economically plausible prices. They then go on to di...

This paper examines the effect on Ireland’s Single Electricity Market (SEM) of the UK’s unilateral policy to implement a carbon price floor for electricity generation based on fossil-fuel. We simulate electricity markets and find that, subject to efficient use of the interconnectors between the two markets, a carbon price floor will lead to carbon leakage, with associated emissions in the Repub...

In Copenhagen climate conference China government promised that China would cut down carbon intensity 40e45% from 2005 by 2020. CET (carbon emissions trading) is an effective tool to reduce emissions. But because CET is not fully implemented in China up to now, how to design it and its potential impact are unknown to us. This paper studies the potential impact of introduction of CET on China’s ...

In 2015, Korea inaugurated an emissions trading scheme (ETS). In this regard, many studies have considered the sustainable performance and efficiency of industries that emit carbon; however, few have examined ETS at company level. This paper focuses on companies’ data related to Korean ETS in the petrochemical industry. Based on the non-radial, nonparametric directional distance function (DDF),...

This paper provides an empirical analysis of the long-run market shares of four ENERGY STAR (ES) appliances in the United States: refrigerators, dishwashers, clothes washers, and room air conditioners. We relate state-level market shares to electricity prices, demographics, and energy efficiency. We then use the results to estimate how a carbon pricing mechanism might influence the market share...