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The economic design of a potential tradable permit system for SO2 emissions in the European Union

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  • Olivier Godard

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Christine Cros

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper contains two main parts. The first develops the issues of the European acid policy, and sets out the general background of the related regulatory regime. It also gives an overview of the theoretical and actual features of emissions trading mechanisms. It then considers the potential attractiveness of SO2 trading in the EU. This background throws light on the more specific analyses and proposals described in the second part of the paper, which is devoted to a presentation of possible frameworks for SO2 trading in the power generation sector in the EU. In section 2.1., we look at some key design variables. In section 2.2., we present three alternative ways of designing a trading scheme. In section 2.3., we consider specific issues related to zoning and scaling.

Suggested Citation

  • Olivier Godard & Christine Cros, 1998. "The economic design of a potential tradable permit system for SO2 emissions in the European Union," Post-Print hal-00622840, HAL.
    • Handle: RePEc:hal:journl:hal-00622840
    Note: View the original document on HAL open archive server: https://hal.science/hal-00622840
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    References listed on IDEAS

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    1. Cason, Timothy N, 1995. "An Experimental Investigation of the Seller Incentives in the EPA's Emission Trading Auction," American Economic Review, American Economic Association, vol. 85(4), pages 905-922, September.
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    3. Olivier Godard, 1997. "Social Decision-Making under Scientific Controversy, Expertise, and the Precautionary Principle," Post-Print halshs-00624027, HAL.
    4. Charles Howe, 1994. "Taxesversus tradable discharge permits: A review in the light of the U.S. and European experience," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 151-169, April.
    5. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
    6. Renee Rico, 1995. "The U.S. allowance trading system for sulfur dioxide: An update on market experience," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 5(2), pages 115-129, March.
    7. Ger Klaassen, 1996. "Acid Rain and Environmental Degradation," Books, Edward Elgar Publishing, number 1165.
    8. George Halkos, 1994. "Optimal abatement of sulphur emissions in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 127-150, April.
    9. Peter Bohm, 1992. "Distributional Implications of Allowing International Trade in CO, Emission Quotas," The World Economy, Wiley Blackwell, vol. 15(1), pages 107-114, January.
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    Cited by:

    1. Olivier Godard, 1998. "On markets and the conditions of a profitable use of economic instruments for environmental policy in countries in transition to market," Post-Print halshs-00624095, HAL.
    2. Olivier Godard, 1998. "Les permis d'émission négociables et la lutte contre la pollution atmosphérique," Post-Print hal-00622857, HAL.

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