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Contribution Details
| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | Output and abatement effects of allocation readjustment in permit trade |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Climatic Change |
| Publisher | Springer |
| Geographical Reach | international |
| ISSN | 0165-0009 |
| Volume | 86 |
| Number | 1-2 |
| Page Range | 33 - 49 |
| Date | 2008 |
| Abstract Text | In permit trading systems, free initial allocation is common practice. A recent example is the European Union Greenhouse Gas Emission Trading Scheme (EU-ETS). We investigate effects of different free allocation schemes on incentives and identify significant perverse effects on abatement and output employing a simple multi-period model. Firms have incentives for strategic action if allocation in one period depends on their actions in previous ones and thus can be influenced by them. These findings play a major role where trading schemes become increasingly popular as environmental or resource use policy instruments. This is of particular relevance in the EU-ETS where the current period is a trial-period before the first commitment period of the Kyoto protocol. Finally, this paper fills a gap in the literature by establishing a consistent terminology for initial allocation. |
| Digital Object Identifier | 10.1007/s10584-007-9281-0 |
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| Additional Information | The original publication is available at www.springerlink.com |