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Optimal Opt-in "Climate" Contracts

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Abstract

The paper studies the design of a treadable permit system with opt-in possibilities for LDCs countries in the context of climate change. In setting the optimal opt-in rule, the regulator faces a trade-off between production efficiency (minimization of control costs) and information rent extraction (reduction of excess permits). Results from simulation exercises based on data from MIT´s EPPA Model are also provided.

Suggested Citation

  • Juan Pablo Montero, 1998. "Optimal Opt-in "Climate" Contracts," Journal of Applied Economics, Universidad del CEMA, vol. 1, pages 363-384, November.
    • Handle: RePEc:cem:jaecon:v:1:y:1998:n:2:p:363-384
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    References listed on IDEAS

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    8. Tirole, Jean, 1986. "Procurement and Renegotiation," Journal of Political Economy, University of Chicago Press, vol. 94(2), pages 235-259, April.
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