Emissions trading with offset markets and free quota allocations

According to classic economic theory, to make calculations on pricing of a good (service), marginal cost should be calculated. An efficient price is where the marginal price is

Hence, if the negotiations result in a ratified tradable quota treaty, shared information concerning the parties’ marginal abatement cost functions will facilitate a prediction of

A tax on fuel which equals the marginal damage of CO2 emissions, a tax on driv- ing distance which equals the marginal damage of mileage-related externalities, and a zero tax on

In addition, we show that with allocation based on updated emissions, the quota price will always exceed the marginal abatement costs.. Numerical simulations indicate that the

This is an undesirable property of the Diamond base MCF-measure, because tax-based funding of a public project in these two cases gives exactly the same values of p i and M i ,

A previous study by Aune and Fæhn (2016) indicates that achieving the emission reduction targets solely within own borders can be costly – a marginal abatement cost of between

The third term within the parenthesis is costs associated with a catastrophic collapse; the change in the hazard rate function from a marginal change in the temperature level,

Note that R&D costs and production costs for abatement equipment together must be equal to the discounted sum of total abatement outlay for the emission sector subtracted the