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Spreading the Green Around the World — How the Permit Allocation Affects Technology Diffusion and Welfare

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  • Endres, Alfred
  • Rundshagen, Bianca

Abstract

We analyze the incentives for polluting firms to diffuse and adopt advanced abatement technology under a system of tradable discharge permits in an international framework. With respect to the choice of the emission target we consider two settings. In the first setting, each country chooses its national emission target (and thereby the initial national permit endowment) noncooperatively. In the second setting, the global emission target is chosen cooperatively. The corresponding national endowments are determined according to a proportional emission reduction of baseline emissions. In both scenarios we consider three variants of permit allocation procedures (auctioning, benchmarking, and grandfathering).

Suggested Citation

  • Endres, Alfred & Rundshagen, Bianca, 2017. "Spreading the Green Around the World — How the Permit Allocation Affects Technology Diffusion and Welfare," Strategic Behavior and the Environment, now publishers, vol. 6(3), pages 249-287, March.
    • Handle: RePEc:now:jnlsbe:102.00000069
    DOI: 10.1561/102.00000069
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    More about this item

    Keywords

    International Environmental Agreements; Induced technical change; Pollution abatement; Permit market; Allocation procedures;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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