Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63045
Year of Publication: 
2006
Series/Report no.: 
Memorandum No. 2006,09
Publisher: 
University of Oslo, Department of Economics, Oslo
Abstract: 
It is a well known result that taking distributional constraints into account when allocating tradable permits to different agents can lead to an imperfectly competitive permit market. Hence, the emission target is no longer met at least cost. In this paper we suggest an allocation rule for permits which can handle this problem. If the permits are allocated twice during the same period, and the allocation in the second round is dependent on the market price for permits, this allocation rule can achieve both cost effectiveness and meet specific requirements for cost distribution across agents.
Subjects: 
Climate Change
Emission Permits
Allocation
Cost Effectiveness
Distributional Constraints
JEL: 
Q52
Q54
Document Type: 
Working Paper

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