Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201871 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7645
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
With the new rules of the EU ETS, involving cancellation of allowances, cumulative emissions are no longer fixed but depending on the market outcome. Perino (2018) showed that additional abatement effort can reduce cumulative emissions if it occurs within a few years. This article shows that Perino’s result will be reversed, i.e., cumulative emissions increase, if the abatement effort is at a later year, or permanent. Thus, a new green paradox has emerged.
Subjects: 
emissions trading
green paradox
EU ETS
MSR
JEL: 
H23
Q54
Q58
Document Type: 
Working Paper
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