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The remaining carbon budget for limiting global warming to 1.5 degrees Celsius will probably be exhausted within this decade.sup.1,2. Carbon debt.sup.3 generated thereafter will need to be compensated by net-negative emissions.sup.4. However, economic policy instruments to guarantee potentially very costly net carbon dioxide removal (CDR) have not yet been devised. Here we propose intertemporal instruments to provide the basis for widely applied carbon taxes and emission trading systems to finance a net-negative carbon economy.sup.5. We investigate an idealized market approach to incentivize the repayment of previously accrued carbon debt by establishing the responsibility of emitters for the net removal of carbon dioxide through 'carbon removal obligations' (CROs). Inherent risks, such as the risk of default by carbon debtors, are addressed by pricing atmospheric CO.sub.2 storage through interest on carbon debt. In contrast to the prevailing literature on emission pathways, we find that interest payments for CROs induce substantially more-ambitious near-term decarbonization that is complemented by earlier and less-aggressive deployment of CDR. We conclude that CROs will need to become an integral part of the global climate policy mix if we are to ensure the viability of ambitious climate targets and an equitable distribution of mitigation efforts across generations. To enable net-negative CO.sub.2 emissions, the repayment of previously accrued carbon debt by establishing the responsibility for the net removal of CO.sub.2 by carbon-emitting parties through carbon removal obligations is necessary., Author(s): Johannes Bednar [sup.1] [sup.2] , Michael Obersteiner [sup.1] [sup.2] , Artem Baklanov [sup.1] [sup.3] , Marcus Thomson [sup.4] , Fabian Wagner [sup.1] , Oliver Geden [sup.1] [sup.5] , Myles [...]

In 2017, large oil and gas companies formed the Climate Leadership Council (CLC) in response to increased social pressure to reduce their emissions to combat climate change. The CLC developed the Carbon Dividends Plan (CDP), which proposes a carbon emissions market mechanism to solve the climate change crisis. The CLC's lobbying arm, the Americans for Carbon Dividends (AFCD), is currently working to educate US congressional leaders on the importance of a carbon tax, like the one proposed in the CDP. In the paper, I address the following question: what can Polanyi's theoretical insights tell us about the CDP and its social implications? I first discuss the CDP within the context of the current climate change crisis. Then, I apply Polanyi's market embeddedness, fictitious commodities, and double movement concepts to the discussion. I illustrate four main points in this paper. First, the CDP is part of an ongoing societal double movement. Second, despite the CLC's neoliberal 'free' market ideals, the self-regulated market proposed in the CDP is a social construction, embedded in social relations, itself. Third, the CDP, and carbon markets in general, comprise one specific type of unconscious countermovement that extends the self-regulated market to combat the destructive forces of the market itself. Fourth, the CDP's proposal for a carbon emissions market mechanism is an unsatisfactory solution to address the climate change crisis, as it will not address the inherent contradictions in the overall system as a whole., Author(s): Amber M. Blazek [sup.1] Author Affiliations: (1) grid.264756.4, 0000 0004 4687 2082, Department of Sociology, Texas A&M University, , 311 Academic Building, 77843-4351, College Station, TX, USA Introduction After [...]

The presence of market power usually has negative impacts on the cost-effectiveness of the carbon market. As market power-induced efficiency loss depends on permit allocation, the choice of permit allocation methods is likely to affect the cost-effectiveness of the carbon market. This paper examines theoretically how the choice of emission permit allocation method affects the cost-effectiveness of an emissions trading system when market power exists. We find that, under grandfathering and benchmarking, the carbon market would be more efficient if the permits initially allocated to the dominant firm were closer to its C[O.sub.2] emissions. Under auctioning, the dominant firm tends to lower the C[O.sub.2] price, which may result in efficiency loss. By combining the modelling results of efficiency loss due to market power and the fairness in terms of C[O.sub.2] cost pass-through, we finally provide some policy recommendations on how to choose a C[O.sub.2] emission permit allocation method for different industries. Keywords: Emission trading, Permit allocation, Market power, Performance, 1. INTRODUCTION Climate change, caused mainly by increasing greenhouse gas emissions, has been recognized as a serious challenge to the survival and development of human beings. It has been universally [...]

Abstract. To analyze incentives for investing in the capacity to generate renewable electricity, we model the trade-off between renewable (e.g., wind) and nonrenewable (e.g., natural gas) technology. Renewable technology has [...]

The life cycle assessment of underground gravity and pressured pipeline networks are studied to quantitatively calculate the carbon dioxide (C[O.sub.2]) emissions. The life cycle of a pipeline can be classified into four phases that are fabrication, transportation, installation, and operation. Three typical flexible underground pipe materials, namely, steel, ductile iron (DI), and polyvinyl chloride (PVC) have been considered. The most dominant phase of the life cycle is pipe manufacturing and fabrication process, resulting in large amounts of C[O.sub.2] emissions. The results indicate that PVC provides the best environmental savings compared to steel and DI pipes in terms of C[O.sub.2] emission and emission mitigation cost. This methodology in estimating life cycle carbon footprint and cost could be used as managerial decision support tool for management of any underground pipeline networks. Key words: carbon footprint, buried pipelines, carbon pricing, energy consumption, embodied carbon. Dans le present article, on etudie et evalue le cycle de vie de reseaux de conduites souterraines libres ou sous pression afin de calculer les emissions de dioxyde de carbone (C[O.sub.2]). Le cycle de vie d'une conduite peut etre divise en quatre phases, soit la fabrication, le transport, l'installation et la mise en service. On s'est interesse a trois materiaux qui composent habituellement les conduites souterraines flexibles: l'acier, la fonte ductile (FD) et le polychlorure de vinyle (PVC). La phase la plus importante du cycle de vie est la fabrication ou la production, dont le procede entraine l'emission de grandes quantites de C[O.sub.2]. Les resultats montrent que le PVC est le materiau le plus ecologique, en termes d'emissions de C[O.sub.2] et de cout de reduction des emissions, si on le compare a l'acier et a la fonte ductile. Cette methode d'evaluation de l'empreinte carbone et du cout du carbone tout au long du cycle de vie des conduites pourrait servir d'outil d'aide a la decision aux personnes responsables de la gestion de n'importe quel reseau de conduites souterraines. [Traduit par la Redaction] Mots-cles: empreinte carbone, conduites souterraines, determination du cout du carbone, consommation d'energie, carbone intrinseque., 1. Introduction The term carbon footprint is commonly used to describe the total amount of carbon dioxide (C[O.sub.2]) and other greenhouse gas emissions in a year caused by an organization, [...]

Abstract: Carbon emissions trading, or cap-and-trade, is increasingly in vogue among Pacific Rim countries as a means of combating climate change. In theory, cap-and-trade promises to solve climate change by [...]

Experts welcome the trading scheme, but question whether it is up to the task of helping China achieve its climate goals. Experts welcome the trading scheme, but question whether it is up to the task of helping China achieve its climate goals., Author(s): Bianca Nogrady Author Affiliations: China launches world's largest carbon market: but is it ambitious enough? A coal-fired power plant in Hangzhou in China's Zhejiang province. Credit: Feature China/Barcroft Media/Getty [...]

Climate change and carbon mitigation are key issues for local government. This paper evaluates carbon actions by 32 local councils in Queensland, Australia. A climate action framework and carbon management [...]

Tradable allowances have received considerable attention in recent years. One emerging issue is their interaction with electricity markets. This paper extends the model of Allaz and Vila (1993) by incorporating [...]

Is the environment the new market frontier? In the past, markets have commonly shaped processes of resource extraction and waste disposal that impact on environmental quality. However, their use as [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jenvman.2010.05.015 Byline: Jessica Coria (a)(b), Asa Lofgren (a), Thomas Sterner (a) Abstract: Whether tradable permits are appropriate for use in transition and developing economies -- given special social and cultural circumstances, such as the lack of institutions and lack of expertise with market-based policies -- is much debated. We conducted interviews and surveyed a sample of firms subject to emissions trading programs in Santiago, Chile, one of the first cities outside the OECD that has implemented such trading. The information gathered allows us to study what factors affect the performance of the trading programs in practice and the challenges and advantages of applying tradable permits in less developed countries. Author Affiliation: (a) Department of Economics, University of Gothenburg, P.O. Box 640, 40530 Gothenburg, Sweden (b) Universidad Diego Portales, Facultad de Economia y Empresa, Santiago, Chile Article History: Received 28 October 2009; Revised 11 April 2010; Accepted 14 May 2010

There is increasing political consensus in Australia that climate change poses real threats to our economy and society, and that some form of policy action is necessary to address these [...]

The dominant narrative that has framed policy debate on the challenge of climate change has been defined in terms of the notion that greenhouse gas emissions must be first and [...]

A study was conducted to examine an emissions trading program which was introduced to reduce smog-causing pollution from large stationary sources. Variation in state level electricity industry restructuring activity is used to identify the effect of economic regulation on pollution permit market outcomes.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.ejor.2009.05.007 Byline: Florian Jaehn (a), Peter Letmathe (b) Keywords: Emissions trading; Banking; Energy; Cooperative game theory; Decision analysis Abstract: This article considers the price history of CO.sub.2 allowances in the EU Emission Trading Scheme. Since European Emissions Trading started in 2005, the prices of allowances have varied between less than one and thirty Euro per ton of CO.sub.2. This previously unpredicted volatility and, more notably, a significant price crash in May 2005 led to the hypothesis that electricity producers might use their market power to influence the prices of allowances. Besides market power, the combination of information asymmetry and price interdependencies (between prices of primary goods - especially electricity - and allowances) plays an important role in explaining the emissions trading paradox. The model presented will show that banking can lead to such a price crash if market participators act rationally. Furthermore, in such a scenario banking can be profitable for sellers at the cost of buyers. Author Affiliation: (a) Institute of Information Systems, University of Siegen, 57068 Siegen, Germany (b) Faculty of Economics, Management Science, and Business Law, University of Siegen, 57068 Siegen, Germany Article History: Received 19 August 2008; Accepted 5 May 2009

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jeem.2009.01.001 Byline: Jared C. Carbone (a), Carsten Helm (b), Thomas F. Rutherford (c) Abstract: We evaluate the efficacy of international trade in carbon emission permits when countries are guided strictly by their national self-interest. To do so, we construct a calibrated general equilibrium model that jointly describes the world economy and the strategic incentives that guide the design of national abatement policies. Countries' decisions about their participation in a trading system and about their initial permit endowment are made non-cooperatively; so a priori it is not clear that permit trade will induce participation in international abatement agreements or that participation will result in significant environmental gains. Despite this, we find that emission trade agreements can be effective; that smaller groupings pairing developing and developed-world partners often perform better than agreements with larger rosters; and that general equilibrium responses play an important role in shaping these outcomes. Author Affiliation: (a) Department of Economics, University of Calgary, SS 454, 2500 University Drive NW, Calgary, Canada T2N 1N4 (b) Darmstadt University of Technology, Germany (c) Centre for Energy Policy and Economics, Swiss Federal Institute of Technology (ETH), Zurich, Switzerland Article History: Received 28 February 2008 Article Note: (footnote) [star] Research supported by the Electric Power Research Institute. Carlo Perroni originally suggested the numerical technique we have employed in these calculations.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.euroecorev.2009.02.002 Byline: Thomas Eichner (a), Rudiger Pethig (b) Abstract: We consider a stylized model of the hybrid CO.sub.2 emissions control in the EU. A group of countries operates a joint emissions trading system (ETS) covering only part of each country's economy. The countries levy an emissions tax in the rest of their economy and, possibly, an additional tax in their ETS sectors. Welfare-maximizing governments are shown to lack incentives for group-efficient policies. Preexisting taxes overlapping with the ETS lead policy makers to allocate more permits to their ETS sectors than cost effectiveness would suggest. The cases of 'small' and 'large' countries exhibit significantly different efficiency implications. Author Affiliation: (a) Department of Economics, University of Bielefeld, Universitatsstr. 25, 33615 Bielefeld, Germany (b) Department of Economics, University of Siegen, Holderlinstr. 3, 57068 Siegen, Germany Article History: Received 9 February 2007; Accepted 20 February 2009 Article Note: (footnote) [star] Helpful comments from Thorvaldur Gylfason, an associate editor and three anonymous referees are gratefully acknowledged. Remaining errors are the authors' sole responsibility.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.reseneeco.2009.04.001 Byline: Christoph Bohringer (a), Knut Einar Rosendahl (b) Keywords: Emissions trading; Allocation of quotas; Strategic behavior Abstract: The EU Emission Trading Scheme (ETS) is breaking new ground in the experience with emission trading regimes across multiple jurisdictions. Since the EU ETS covers only some industries, it implies a hybrid emission control scheme where EU member states must apply complementary domestic emissions regulation for the non-trading sectors of their economies in order to comply with their national emission reduction targets. The EU ETS thus opens up for strategic partitioning of national emissions budgets by the member states between trading and non-trading sectors. In this paper we examine the potential effects of such strategic behavior on compliance cost and emissions prices. We show that concerns on efficiency losses from strategic partitioning are misplaced. In turn, our analysis implicitly indicates significant political economy forces behind EU climate policy, as both cost-effective and strategically motivated partitioning of national emission budgets are far off from the actual break-down between trading and non-trading sectors. Author Affiliation: (a) University of Oldenburg, Department of Economics, and Centre for European Economic Research (ZEW), Germany (b) Statistics Norway, Research Department, Pob. 8131 Dep., N-0033 Oslo, Norway Article History: Received 7 April 2008; Revised 23 March 2009; Accepted 2 April 2009

To authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-8462.2009.00529.x Byline: Paul Simshauser ([dagger]), Thao Doan ([double dagger]) Abstract: Abstract Electricity generators accept that emissions trading is fundamental to meeting CO.sub.2 reduction targets. But unless a percentage of permits are allocated, existing generators will face non-trivial wealth transfers. Seldom contemplated in academic works are the adverse economic consequences of an all-auction approach to emissions trading. Using Victoria to illustrate, we find that once CO.sub.2 prices exceed $17.50/t, the marginal coal generator facing large wealth transfers will withhold generating capacity to raise prices and recoup stranded investments, thus becoming a 'wounded bull' in the market place. This has material welfare implications with modelling results indicate an intermediate-run 300 per cent increase in wholesale power prices. Author Affiliation: ([dagger])AGL Energy Ltd ([double dagger])Stanwell Corporation Limited Article History: First version received January 2008;final version accepted September 2008 (Eds).

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jedc.2007.07.001 Byline: A. Bernard (a), A. Haurie (b), M. Vielle (c), L. Viguier (d) Abstract: This paper proposes a computable dynamic game model of the strategic competition between Russia and developing countries (DCs), mainly represented by China, on the international market of emission permits created by the Kyoto Protocol. The model uses a formulation of (i) a demand function for permits from Annex B countries and (ii) marginal abatement costs (MAC) in Russia and China provided by two detailed models. GEMINI-E3 is a computable general equilibrium model that provides the data to estimate Annex B demand for permits and MACs in Russia. POLES is a partial equilibrium model that is used to obtain MAC curves for China. The competitive scenario is compared with a monopoly situation where only Russia is allowed to play strategically. The impact of allowing DCs to intervene on the international emission trading market is thus assessed. Author Affiliation: (a) French Ministry of Equipment, Transportation and Housing, Tour Pascal B, 92055 La Defense Cedex 04, France (b) HEC-Geneva, Uni-Mail, 40 Blvd. du Pont-d'Arve, CH-1211 Geneva 4, Switzerland (c) CEA-LERNA, Manufacture des Tabacs, 21 Allee de Brienne, 31000 Toulouse Cedex, France (d) Lombard Odier Darier Hentsch & Cie 11 Rue de la Corraterie 11 1204 Geneva, Switzerland Article History: Received 8 October 2002; Accepted 6 July 2007

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.ejor.2005.11.003 Byline: Aiying Rong, Risto Lahdelma Keywords: Stochastic optimization; CO.sub.2 emissions trading; Combined heat and power (CHP) production; Energy Abstract: The EU emissions trading scheme (ETS) taking effect in 2005 covers CO.sub.2 emissions from specific large-scale industrial activities and combustion installations. A large number of existing and potential future combined heat and power (CHP) installations are subject to ETS and targeted for emissions reduction. CHP production is an important technology for efficient and clean provision of energy because of its superior carbon efficiency. The proper planning of emissions trading can help its potential into full play, making it become a true 'winning technology' under ETS. Fuel mix or fuel switch will be the reasonable choices for fossil fuel based CHP producers to achieve their emissions targets at the lowest possible cost. In this paper we formulate CO.sub.2 emissions trading planning of a CHP producer as a multi-period stochastic optimization problem and propose a stochastic simulation and coordination approach for considering the risk attitude of the producer, penalty for excessive emissions, and the confidence interval for emission estimates. In test runs with a realistic CHP production model, the proposed solution approach demonstrates good trading efficiency in terms of profit-to-turnover ratio. Considering the confidence interval for emission estimates can help the producer to reduce the transaction costs in emissions trading. Comparisons between fuel switch and fuel mix strategies show that fuel mix can provide good tradeoff between profit-making and emissions reduction. Author Affiliation: University of Turku, Department of Information Technology, Lemminkaisenkatu 14 A, FIN-20520 Turku, Finland Article History: Received 15 December 2004; Accepted 4 November 2005

The measure taken by the European Union by proposing the Emissions Trading Directive to reduce energy consumption by manufacturing industries, is discussed.

A study examines green house gas crediting programs for setting greenhouse gas performance standards.

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.reseneeco.2005.08.001 Byline: Carolyn Fischer Keywords: Emissions permits; Transfer pricing; Taxation; Multinational corporations Abstract: Many studies have shown that the activities of multinational corporations are quite sensitive to differences in income tax rates across countries. In this paper I explore the interaction between multinational taxation and abatement activities under an international emissions permit trading scheme. Four types of plans are considered: (1) a single domestic permit system with international offsets; (2) separate national permit systems without trade; (3) separate national permit systems with limited offsets; and (4) an international permit trading system. For each plan, I model the incentives for the multinational firm to choose abatement activities at home and abroad and to transfer emissions credits between parent and subsidiary. Limits on trading across countries restrict efficiency gains from abatement, as is well known. But if available offset opportunities are limited to actual abatement activities, those activities are also more susceptible to distortions from incentives to shift taxable income. Transfer-pricing rules can limit but not always eliminate these distortions. In a system of unlimited international trading, abatement is efficiently allocated across countries, but tax shifting can still be achieved through intra-firm transfer pricing. From the basis of efficiency for both environmental and tax policies, the best design is an international permit trading system with transparent, enforceable transfer-pricing rules. Author Affiliation: Resources for the Future, Energy and Natural Resources Division, 1616 P Street, NW, Washington, DC 20036-1400, USA Article History: Received 1 April 2002; Revised 6 May 2005; Accepted 3 August 2005

A study on emissions trading of greenhouse gases by the multinational companies and the tax imposed on them for the trade, are discussed.

A study examines climate change policy with focus on conflicts over allocation of greenhouse gas emissions.

A study on an enforcement agency's optimal audit policy for firms is presented. Focus on firms' emissions and environmental tax avoidance behavior is also reported.

A study analyzing the benefits in terms of pollution abatement resulting from initial distribution of tradable environmental rights is presented. It is also observed that market forces tend to bring down these benefits. An environmental policy that reduces the distortion of envisaged benefits from the distribution of tradable pollution rights is suggested.

The impact of Clean Air Act amendments of 1970 on potential costs of pollution control, by US manufacturing industries, is examined.

The imports and exports of carbon dioxide of Spain through international trading of various goods are analyzed. The study shows slight exporting behavior in the Spanish economy and hides the important pollution interchanges.

The new estimates for emission fees for sulfur dioxide (SO2) and nitrogen oxides (NOx) emission in the electricity sector in the US, using a simulation of the US electricity markets taking into account various factors is provided.

Segmentation of markets may be the best method of controlling green emission certificate trading in Flanders, Belgium, for the next few years.

The efficiency and redistributive power of polluting good taxes in different tax systems are examined. The welfare implications of introducing environmental taxes in the French tax system are studied.

Endogenous choices of tradable and non-tradable emission allowances by non-cooperative countries are compared. It is found that cost savings of trading do not necessarily lead to less pollution.

Stochastic permit prices may reduce a firm's incentive to invest in abatement capital or technologies relative to other policies such as a fixed emissions charge. A rational expectations general equilibrium model of permit trading and irreversible abatement investment is developed to show how cost uncertainties affect investment under permits.

Climate policy uses carbon emissions trading as a key instrument for helping to reduce emissive pollutants. This paper examines some equity issues that are influential on emission rights allocation decisions.