Arbeitspapier

Market power in international emissions trading : the impact of U.S. withdrawal from the Kyoto Protocol

This paper investigates the implications of U.S. withdrawal on environmental effectiveness, economic efficiency, and the distribution of compliance costs taking into account market power of the Former Soviet Union (FSU) on emission permit markets. While exercise of market power on behalf of FSU under U.S. compliance has no environmental impact as compared to competitive permit trade, it prevents the Kyoto Protocol from boiling down to business-as-usual after U.S. withdrawal. Non-compliance of the U.S. increases the efficiency losses from FSU market power and reduces the compliance costs of remaining OECD countries but these gains must be weighted against a dramatic loss in overall environmental effectiveness. Clearly, the big losers from U.S. withdrawal are FSU and its competitive fringe (Central and Eastern Europe) that suffer from a huge decline in permit sales revenues.

Language
Englisch

Bibliographic citation
Series: ZEW Discussion Papers ; No. 01-58

Classification
Wirtschaft
Environmental Economics: Government Policy
Energy and the Macroeconomy
Computable and Other Applied General Equilibrium Models
Subject
climate policy
emission trading
market power
Klimaschutz
Internationale Umweltpolitik
Emissionsrechte
Marktmacht
Wirtschaftliche Effizienz
Folgekosten
Welt
USA
Sowjetunion - Nachfolgestaaten
Russland

Event
Geistige Schöpfung
(who)
Böhringer, Christoph
Löschel, Andreas
Event
Veröffentlichung
(who)
Zentrum für Europäische Wirtschaftsforschung (ZEW)
(where)
Mannheim
(when)
2001

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Böhringer, Christoph
  • Löschel, Andreas
  • Zentrum für Europäische Wirtschaftsforschung (ZEW)

Time of origin

  • 2001

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