Ancillary Benefits of Carbon Mitigation: How Does it Affect Cost Effectiveness of the Annex-1 Emissions Trading?
DOI:
https://doi.org/10.15173/esr.v16i2.516Keywords:
carbon mitigation, ancillary benefits, international emissions trading, cost effectiveness,Abstract
This paper explores how ancillary benefits of carbon mitigation may affect the cost effectiveness of Annex-1 emissions trading. We find that emissions trading could lead to cost-savings for both the Annex-1 countries as a whole and for the individual countries, as compared with the case of no-trading. The sum of the compliance costs is minimized under the cost-effective condition where marginal costs of domestic abatement are equalized across the Annex-1 countries. However, such a condition of cost effectiveness in emissions trading does not imply cost effectiveness in terms of the compliance of individual countries. The buyers of emission allowances, consisting of the European Union, the United States and Japan, could have even lower costs of compliance in the trading case where the ancillary benefits are taken into consideration. This result supports the intervention that takes account of the ancillary benefit in designing national carbon mitigation policies. To achieve the cost effectiveness in national carbon abatement, there should be regulatory interventions so that the price of carbon emission allowances can reflect the ancillary benefits.
Downloads
Published
Issue
Section
License
Rights for Authors
As further described in our submission agreement (the Submission Agreement), in consideration for publication of the article, the authors assign to Energy Studies Review all copyright in the article, subject to the expansive personal--use exceptions described below.
Attribution and Usage Policies
Reproduction, posting, transmission or other distribution or use of the article or any material therein, in any medium as permitted by a personal-use exemption or by written agreement of Energy Studies Review, requires credit to Energy Studies Review as copyright holder (e.g., Energy Studies Review © 2014).
Personal-use Exceptions
The following uses are always permitted to the author(s) and do not require further permission from DigitalCommons@McMaster provided the author does not alter the format or content of the articles, including the copyright notification:
- Storage and back-up of the article on the author's computer(s) and digital media (e.g., diskettes, back-up servers, Zip disks, etc.), provided that the article stored on these computers and media is not readily accessible by persons other than the author(s);
- Posting of the article on the author(s) personal website, provided that the website is non-commercial;
- Posting of the article on the internet as part of a non-commercial open access institutional repository or other non-commercial open access publication site affiliated with the author(s)'s place of employment (e.g., a Phrenology professor at the University of Southern North Dakota can have her article appear in the University of Southern North Dakota's Department of Phrenology online publication series); and
- Posting of the article on a non-commercial course website for a course being taught by the author at the university or college employing the author.
People seeking an exception, or who have questions about use, should contact the editors.
