FEEM working papers "Note di lavoro" series
2010 .033

The Role of International Carbon Offsets in a Second-best Climate Policy: A Numerical Evaluation


Autori: Enrica De Cian, Massimo Tavoni
Serie: Climate Change and Sustainable Development
Editor: Carlo Carraro
Tipo: Journal
Parole chiave: Energy-economy Modelling, Climate Policy, Technology Spillovers
Numero JEL: Q54, Q55, Q43, H23
JEL: Resource and Energy Economics
Pagine: Vol. 34, No. 1, pp. 624-646
Data: 11/2012

Abstract

International carbon offsets have been promoted since the Kyoto Protocol and an increasing number of countries have implemented or proposed cap-and-trade schemes with international trading, even though with quantitative or qualitative restrictions. Those limits reflect the trade-off between economic efficiency, distributional issues, and the need for additionality of foreign mitigation measures. Ceilings are also justified on the ground that international offsets undermine the capability of climate policy to induce and diffuse technological change. This paper addresses these issues in a second-best setting that explicitly considers the interplay between multiple externalities. We evaluate numerically how limits to the size, the timing, and the participation in an international carbon market affect the macroeconomic costs of climate policy, international financial transfers, and the incentive to carry out innovation. Results indicate that when constraints on international offsets are moderate, such as limiting their use to at most 15% of regional abatement, efficiency losses are small because they are partly compensated by more technological change and energy market effects, although specific regional patterns are identified. Regarding financial outflows from OECD countries, already a 15% ceiling would limit financial transfers significantly. Provisions of this kind are in line with some of the most recent policy proposals in OECD countries.

***

Suggested citation: Enrica De Cian, Massimo Tavoni, Do technology externalities justify restrictions on emission permit trading?, Resource and Energy Economics, Volume 34, Issue 4, November 2012, Pages 624-646, ISSN 0928-7655, http://dx.doi.org/10.1016/j.reseneeco.2012.05.009

Download file
Scarica il file PDF
links
Link

FEEM Newsletter

Iscriviti per rimanere aggiornato.

I Suoi dati saranno trattati dalla Fondazione Eni Enrico Mattei. – Titolare del trattamento – per ricevere via posta elettronica la newsletter della Fondazione. Il conferimento dell’indirizzo e-mail è necessario alla fornitura del servizio. La invitiamo a consultare la Privacy Policy per ottenere maggiori informazioni a tutela dei Suoi diritti.

Questo Sito utilizza cookie tecnici e analytics, nonché consente l’invio di cookie di profilazione di terze parti.
Chiudendo questo banner o comunque proseguendo la navigazione sul Sito manifesti il tuo consenso all’uso dei cookie. Per ulteriori informazioni e per esprimere scelte selettive in ordine all’uso dei cookie vedi la   Cookie PolicyOk