Original scientific paper
https://doi.org/10.1080/1331677X.2020.1861960
Does emission discrimination improve environmental effectiveness of emission trading schemes? A duopoly approach
Zhe Chen
Yue Su
Xue-ying Wang
You Wu
Abstract
In this paper, we theoretically analyze that how emission discrimination policies affect the environmental effectiveness of carbon
emission trading scheme under different emission permit allocation rules. By the setting of duopoly, we characterize the environmental effectiveness of carbon emission trading scheme, design
various emission discrimination policies and then explore connections between the environmental effectiveness and emission discrimination policies. Our main results suggest that not all
environmental effectiveness of carbon emission trading schemes are
very sensitive to emission discrimination policies. Under grandfathering rule, the emission discrimination policy is not valid to facilitate
the environmental effectiveness of carbon emission trading scheme.
However under benchmarking rule, the environmental effectiveness
of carbon emission trading scheme can be remarkably improved by
an appropriate emission discrimination policy. Furthermore, we also
compare the actual emissions in carbon emission trading schemes
and conclude that the carbon emission trading scheme with benchmarking rule is a better choice for an ‘active’ regulatory authority
from the viewpoint of policy efficiency.
Keywords
Emission trading scheme; environmental effectiveness; emission permit allocation; emission discrimination; duopoly
Hrčak ID:
301353
URI
Publication date:
31.12.2021.
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