Price floors for emissions trading
Date
2011
Authors
Wood, Peter J
Jotzo, Frank
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Volume Title
Publisher
Elsevier
Abstract
Price floors in greenhouse gas emissions trading schemes can guarantee minimum abatement efforts if prices are lower than expected, and they can help manage cost uncertainty, possibly as complements to price ceilings. Provisions for price floors are found in several recent legislative proposals for emissions trading. Implementation however has potential pitfalls. Possible mechanisms are government commitments to buy back permits, a reserve price at auction, or an extra fee or tax on acquittal of emissions permits. Our analysis of these alternatives shows that the fee approach has budgetary advantages and is more compatible with international permit trading than the alternatives. It can also be used to implement more general hybrid approaches to emissions pricing.
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Keywords: Cost uncertainty; Emissions Trading; Hybrid approach; Hybrid emissions pricing; Price floor; Reserve price; Commerce; Emission control; Floors; Gas emissions; Global warming; Greenhouse gases; Costs; emissions trading; energy policy; environmental economi Emissions trading; Hybrid emissions pricing; Price floor
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Source
Energy Policy
Type
Journal article
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Restricted until
2037-12-31
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