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The political economy of International Emissions Trading Scheme Choice: a theoretical analysis

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The Kyoto Protocol allows emission trade between the Annex B countries. We consider three schemes of emissions trading: government trading, permit trading and credit trading. The schemes are compared in a public choice setting focusing on group size and rent-seeking from interest groups. We find that industry will have most influence on government policy, with environmental organizations taking second place. Our conclusion is that most interest groups prefer a combination of government trading and credit trading even though permit trading is more efficient. Furthermore, some governments prefer government trading because it retains the possibility of hot air trading.
Udgivelsesdato: DEC
Original languageEnglish
JournalJournal of Institutional and Theoretical Economics
Pages (from-to)548-66
Number of pages19
Publication statusPublished - 2000

    Research areas

  • Emissions Trading, CO2, Kyoto, Public Choice, HHÅ forskning

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