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Linkage of tradable permit systems in international climate policy architecture

Author: Judson Jaffe; R N Stavins; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, ©2008.
Series: Working paper series (National Bureau of Economic Research), no. 14432.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
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 reduce compliance costs  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Judson Jaffe; R N Stavins; National Bureau of Economic Research.
OCLC Number: 263684568
Notes: "October 2008."
Description: 1 online resource (24 pages).
Series Title: Working paper series (National Bureau of Economic Research), no. 14432.
Responsibility: Judson Jaffe, Robert N. Stavins.

Abstract:

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 reduce compliance costs and improve market liquidity, there is great interest in linking cap-and-trade systems to each other, as well as to the CDM and other credit systems. We examine the benefits and concerns associated with various types of linkages, and analyze the near-term and long-term role that linkage may play in a future international climate policy architecture. In particular, we evaluate linkage in three potential roles: as an independent bottom-up architecture, as a step in the evolution of a top-down architecture, and as an ongoing element of a larger climate policy agreement. We also assess how the policy elements of climate negotiations can facilitate or impede linkages. Our analysis throughout is both positive and normative.

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