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The European union as first mover in the market for greenhouse gas emissions permits

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  • Agustin Molina Morales
  • Miguel Guerrero

Abstract

This study aims to analyse the potential market for emissions permits that the European Union (EU) established in 2005, in a first-mover attitude with regard to the frame of the Kyoto Protocol. To this end the integrated assessment Regional Integrated Climate and the Economy (RICE) model is employed, adapted to the specific objectives intended. A referential paretian-optimum price of US$25.63 tCO2 is obtained around the year 2007, which duplicates the hypothetical harmonized carbon tax. The ratio between the willingness to pay and the net environmental damages as a result of adverse climate change point to the high degree of commitment and the leadership initiative that seem to be assumed by the EU-15, the extended EU including Eastern European countries and the European OECD as a whole, with the hinterland geo-strategic referent represented by Russia and the Ukraine.

Suggested Citation

  • Agustin Molina Morales & Miguel Guerrero, 2006. "The European union as first mover in the market for greenhouse gas emissions permits," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 49(4), pages 533-553.
    • Handle: RePEc:taf:jenpmg:v:49:y:2006:i:4:p:533-553
    DOI: 10.1080/09640560600747729
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    References listed on IDEAS

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    1. Alessandra Casella, 1999. "Tradable deficit permits: efficient implementation of the Stability Pact in the European Monetary Union," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 14(29), pages 322-361.
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    3. Robert W. Hahn & Robert Stavins, 1999. "What Has the Kyoto Protocol Wrought? The Real Architecture of Tradable Permit Markets," Books, American Enterprise Institute, number 52837, September.
    4. Stavins, Robert & Hahn, Robert, 1999. "What Has Kyoto Wrought? The Real Architecture of International Tradable Permit Markets," RFF Working Paper Series dp-99-30, Resources for the Future.
    5. Minh Ha-Duong & Patrice Dumas, 2004. "An abrupt stochastic damage function to analyse climate policy benefits," Post-Print halshs-00002451, HAL.
    6. Paul Koutstaal, 1997. "economic policy and climate change," Books, Edward Elgar Publishing, number 1316.
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    Cited by:

    1. Venmans, Frank, 2012. "A literature-based multi-criteria evaluation of the EU ETS," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 5493-5510.

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