Carbon markets in space and time

Fankhauser, Samuel ORCID: 0000-0003-2100-7888 and Hepburn, Cameron (2009) Carbon markets in space and time. Centre for Climate Change Economics and Policy and Grantham Research Institute on Climate Change and the Environment (3). Centre for Climate Change Economics and Policy and Grantham Research Institute on Climate Change and the Environment, London, UK.

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Abstract

This paper analyses the design of carbon markets in time (intertemporally) and space (geographically) from first principles, starting initially with a relatively clean slate and asking what an optimal global carbon market would look like by around 2030. Our focus is on firmlevel trading systems, although much of what we say would also apply to government-level trading (e.g., AAU trading under the Kyoto Protocol). We examine the “first principles” of design to maximise flexibility and to minimise costs, consider temporal design including banking and borrowing and other mechanisms to provide greater carbon price predictability and credibility over time, and consider spatial elements, examining the key design issues in linking national and regional carbon markets together to create a global carbon market.

Item Type:	Monograph (Working Paper)
Official URL:	http://www2.lse.ac.uk/GranthamInstitute/Home.aspx
Additional Information:	© 2009 The Author
Divisions:	Grantham Research Institute
Subjects:	G Geography. Anthropology. Recreation > GE Environmental Sciences J Political Science > JZ International relations
JEL classification:	H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply
Date Deposited:	26 Jul 2011 15:13
Last Modified:	15 Sep 2023 23:18
URI:	http://eprints.lse.ac.uk/id/eprint/37606

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