Research Papers in Economics, Department of Economics, Stockholm University
Comparing Permit Allocation Options: The Main Points
Abstract: In discussions about the policy design of domestic
emission trading, e.g., when implementing the
Kyoto Protocol, the two
permit allocation alternatives auctioning and allocation gratis
(grandfathering) are often pitted against each other as representing
utopian cost-effectiveness and
political realism, respectively. In this
note, an attempt is made to extract the main points of a
between the two options with respect to efficiency and distribution.
Keywords: Domestic carbon emissions trading; permit allocation; grandfathering; auctioning; cost effectiveness; Kyoto protocol; (follow links to similar papers)
JEL-Codes: Q25; Q28; (follow links to similar papers)
7 pages, April 20, 2002
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