Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171686
Authors: 
Abrell, Jan
Rausch, Sebastian
Yonezawa, Hidemichi
Year of Publication: 
2017
Series/Report no.: 
Economics Working Paper Series 16/243
Abstract: 
This paper examines the efficiency and distributional impacts of introducing a price floor in an emissions trading system (ETS) when environmental regulation is partitioned. We theoretically characterize the conditions under which a price floor enhances welfare. Using a multi-country multi-sector numerical general equilibrium model of the European carbon market, we find that moderate minimum price levels in the EU ETS can reduce the costs of EU climate policy by up to thirty percent and yield outcomes close to uniform carbon pricing. Moreover, most of the EU Member States would gain. Our results are robust with respect to parametric uncertainty in production and consumption technologies.
Subjects: 
Emissions Trading
Price Floors
EU ETS
Partitioned Environmental Regulation
General Equilibrium
JEL: 
H23
Q52
Q58
C68
Document Type: 
Working Paper

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