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Department of Economics, Stockholm University Research Papers in Economics, Department of Economics, Stockholm University

No 2002:10:
Improving Cost-effectiveness and Facilitating Participation of Developing Countries in International Emissions Trading

Peter Bohm

Abstract: This paper discusses ways in which the next climate agreement a renegotiated

Kyoto Protocol or a second-period agreement can be made more cost-effective. The

discussion focuses on the design of international emissions trading to facilitate early

participation by developing countries. Four aspects are highlighted: the design of

compensation rules, the need to regulate the use of the CDM, the effect of allowing

borrowing and the implications of a Commitment Period Reserve.

Keywords: Climate change policy; cost effectiveness; international emissions trading; Kyoto protocol; Clean Development Mechanism; Commitment Period Reserve; developing countries; (follow links to similar papers)

JEL-Codes: Q25; Q28; (follow links to similar papers)

18 pages, September 20, 2001

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This paper is published as:
Bohm, Peter, (2002), 'Improving Cost-effectiveness and Facilitating Participation of Developing Countries in International Emissions Trading', International Environmental Agreements: Politics, Law and Economics, Vol. 2, No. 3, pages 261-275



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