Abstract
Emissions trading is a market-based instrument to achieve environmental targets in a cost-effective way by allowing legal entities to buy and sell emission rights. The current international dissemination and intended linking of emissions trading schemes underlines the growing relevance of this instrument. There are three basic design variants of emissions trading: cap-and-trade (allowance trading), performance standard rate trading (credit trading), and project-based credit trading (such as domestic offsets, JI, and the CDM). These design variants are analyzed in terms of effectiveness, efficiency, and acceptance. It is also explained why emissions trading schemes may become inefficient hybrids of such design variants.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Coase RH (1960) The problem of social cost. J Law Econ 3:1–44
Dales JH (1968) Pollution, property and prices: an essay in policy-making and economics. Toronto University Press, Toronto
de Perthuis C, Trotignon R (2013) Governance of CO2 markets: lessons from the EU ETS. Working paper series no 2013–07, CDC Climat, Climate Economics Chair, Paris
de Vries FP, Dijkstra BR, McGinty M (2013) On emissions trading and market structure: cap-and-trade versus intensity standards. Environ Resour Econ. https://doi.org/10.1007/s10640-013-9715-2
Dewees DN (2001) Emissions trading: ERCs or allowances? Land Econ 77(4):513–526
Dijkstra BR (1999) The political economy of environmental policy: a public choice approach to market instruments. Edward Elgar, Cheltenham
Dutschke M, Michaelowa A (1999) Creation and sharing of credits through the Clean Development Mechanism under the Kyoto Protocol. In: Jepma CJ, van der Gaast WP (eds) On the compatibility of flexible instruments. Kluwer, Dordrecht, pp 47–64
Ellerman D (2007) New entrant and closure provisions: how do they distort? Energy J 28:63–78
Faure M, Peeters M (eds) (2008) Climate change and European emissions trading: lessons for theory and practice. Edward Elgar, Cheltenham
Grubb M, Neuhoff K (2006) Allocation and competitiveness in the EU emissions trading scheme: policy overview. Clim Policy 6(1):7–30
Hahn RW, Stavins RN (2011) The effect of allowance allocations on cap-and-trade system performance. J Law Econ 54:267–294
ICAP (2014) International overview of emissions trading schemes. Available online at https://icapcarbonaction.com/ets-map
Jaraitė J, Jong T, Kažukauskas A, Zaklan A, Zeitlberger A (2013) Matching EU ETS accounts to historical parent companies: a technical note. European University Institute, Florence. Available online at http://fsr.eui.eu/CPRU/EUTLTransactionData.aspx
Jepma CJ, Munasinghe M (1998) Climate change policy: facts, issues and analyses. Cambridge University Press, Cambridge
Nentjes A, Woerdman E (2012) Tradable permits versus tradable credits: a survey and analysis. Int Rev Environ Resour Econ 6(1):1–78
Nentjes A, Boom JT, Dijkstra BR, Koster M, Woerdman E, Zhang ZX (2002) National and international emissions trading for greenhouse gases. Dutch National Research Programme on Global Air Pollution and Climate Change (NRP) Report No. 410 200 093, Bilthoven
Tietenberg T (1980) Transferable discharge permits and the control of stationary source air pollution: a survey and synthesis. Land Econ 56(4):391–416
Tietenberg T, Grubb M, Michaelowa A, Swift B, Zhang ZX (1999) International rules for greenhouse gas emissions trading: defining the principles, modalities, rules and guidelines for verification, reporting and accountability. UNCTAD/GDS/GFSB/Misc.6, United Nations Conference on Trade and Development (UNCTAD), Geneva
van Zeben J (2014) The allocation of regulatory competence in the EU emissions trading scheme. Cambridge University Press, Cambridge
Weishaar SE (2007) CO2 emission allowance allocation mechanisms, allocative efficiency and the environment: a static and dynamic perspective. Eur J Law Econ 24:29–70
Weishaar SE (2014) Emissions trading design: a critical overview. Edward Elgar, Cheltenham
Woerdman E (2004) The institutional economics of market-based climate policy. Elsevier, Amsterdam
Woerdman E (2015) The EU greenhouse gas emissions trading scheme. In: Holwerda M, Roggenkamp MM, Woerdman E (eds) Essential EU climate law. Edward Elgar, Cheltenham (forthcoming)
Woerdman E, Arcuri A, Clò S (2008) Emissions trading and the polluter-pays principle: do polluters pay under grandfathering? Rev Law Econ 4(2):565–590
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Science+Business Media, LLC, part of Springer Nature
About this entry
Cite this entry
Woerdman, E. (2019). Emissions Trading. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_61
Download citation
DOI: https://doi.org/10.1007/978-1-4614-7753-2_61
Published:
Publisher Name: Springer, New York, NY
Print ISBN: 978-1-4614-7752-5
Online ISBN: 978-1-4614-7753-2
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences