Jump to ContentJump to Main Navigation
Emissions Trading as a Policy InstrumentEvaluation and Prospects$
Users without a subscription are not able to see the full content.

Marc Gronwald and Beat Hintermann

Print publication date: 2015

Print ISBN-13: 9780262029285

Published to MIT Press Scholarship Online: January 2016

DOI: 10.7551/mitpress/9780262029285.001.0001

Show Summary Details
Page of

PRINTED FROM MIT PRESS SCHOLARSHIP ONLINE (www.mitpress.universitypressscholarship.com). (c) Copyright The MIT Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in MITSO for personal use.date: 04 August 2021

Combining International Cap-and-Trade with National Carbon Taxes

Combining International Cap-and-Trade with National Carbon Taxes

Chapter:
(p.123) 6 Combining International Cap-and-Trade with National Carbon Taxes
Source:
Emissions Trading as a Policy Instrument
Author(s):

Peter Heindl

Peter J. Wood

Frank Jotzo

Publisher:
The MIT Press
DOI:10.7551/mitpress/9780262029285.003.0006

This chapter examines the effects of combining an international cap-and-trade scheme with national carbon taxes. We consider a two-country stochastic partial equilibrium model with log-normally distributed uncertainty. The situation is analogous to the situation where European countries impose national carbon taxes in addition to the EU emissions trading. The allowance price in the joint cap-and-trade scheme depends on the tax rate, the relative size of countries and abatement options, the magnitude of uncertainty, and correlation of abatement costs. In most cases, the additional tax will not lead to additional production of the public good beyond the fixed targets. The additional tax results in higher costs of abatement to the country introducing the additional tax, and higher costs overall.

Keywords:   prices vs. quantities, linking, cap-and-trade, carbon tax, uncertainty, EU Emissions Trading Scheme

MIT Press Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs, and if you can't find the answer there, please contact us.