201. An economic analysis of tradeable emission permits for sulphur dioxide emissions in Europe
- Author
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Folmer, H., Hordijk, L., Kruitwagen, S., Folmer, H., Hordijk, L., and Kruitwagen, S.
- Abstract
7.1 IntroductionThis study has examined the question of whether a system of tradeable emission permits can contribute to a cost-effective reduction of SO 2 emissions in Europe, taking into account prespecified deposition targets and what sort of system it should be. To deal with this question three research topics have been examined.(I) What are the main economic aspects of a European acid rain policy?(II) What are the advantages and the disadvantages of using a system of tradeable permits to implement a European acid rain policy?(III) What should a system of tradeable emission permits for a non-uniformly mixing pollutant look like in order to take deposition targets into account?This chapter summarizes and presents the conclusions of this research. First 1 present the conclusion on the efficacy of the different integrated assessment models in analysing the effects of emission reduction. I then summarize the conclusions on guided bilateral permit trading. Finally, I make several suggestions for further research.7.2 Economic theory of pollution controlIn this research I have followed the ecological approach to pollution control. This approach does not aim at optimal pollution control levels where marginal abatement costs equal marginal benefits. Marginal benefits are usually too difficult to determine. Instead it aims at cost-effective abatement of pollutants to reach prespecified enviromnental targets. Since acid rain is an international environmental problem, cost- effective abatement needs to be considered in an international context. To achieve cost-effective international abatement it is necessary to have cooperation among countries. Although full cooperation results in minimized total costs for the cooperating countries, individual countries may, however, not act accordingly. This has been explained by the existence of the prisoner's dilemma. However, the assumptions underlying the prisoner's dilemma do not always hold in reality, and in the real world, countri
- Published
- 1996