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Linking emission trading schemes: a short note

Grüll, Georg and Taschini, Luca (2012) Linking emission trading schemes: a short note. Economics of Energy and Environmental Policy, 1 (3). ISSN 2160-5882

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Abstract

In principle, linking emission trading schemes would favour the depletion of low-cost abatement opportunities that are geographically spread over the globe. However, this would only be possible if the price of the emission permits in the different schemes converge to one price. Using a simple model-free structure, the paper first assesses how a unilateral link between two schemes or a bilateral link between schemes with restrictions on the amount of imported permits preempt a correct price convergence. Second, it shows under which conditions bilateral links between schemes with price containment mechanisms allows permit price convergence.

Item Type: Article
Official URL: http://www.iaee.org/en/publications/eeepjournal.as...
Additional Information: © 2012 International Association for Energy Economics
Library of Congress subject classification: G Geography. Anthropology. Recreation > GE Environmental Sciences
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 30 Nov 2012 09:51
URL: http://eprints.lse.ac.uk/47562/

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