Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System
Date: 2008-09
By: Robert N. Stavins (Harvard University)URL: http://d.repec.org/n?u=RePEc:fem:femwpa:2008.67&r=env
There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an up- stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO2 greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 percent over 25 years. The system provides for linkage with emission reduction credit projects in other countries, harmonization over time with effective cap-and-trade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products.Keywords: Cap-and-Trade System, Carbon Dioxide, Greenhouse Gas Emissions, Global Climate Change, Carbon Taxes
JEL: Q54 Q28 Q38 Q48 Q58
I've printed this out and will carry it around with my stack of other things that I'm hoping to read but I probably won't be able to actually read it, though I'll be able to skim a few pages, until after cap-and-trade legislation is passed in the U.S. sometime during the first term of the [McCain/Obama] presidency.
