Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/73316 
Year of Publication: 
2000
Series/Report no.: 
Working Paper No. 0009
Publisher: 
Johannes Kepler University of Linz, Department of Economics, Linz
Abstract: 
In the context of emission trading it seems to be taken as given that people's preferences can be ignored with respect to the whole process of fixing emission targets and allocating emission permits to polluters. With this paper we want to reopen the debate on how citizens can be involved in this process. We try to show how citizen preferences can be included in the process of pollution control through emission trading. We propose an emission trading system where all emission permits are initially allocated to households who are then allowed to sell them in the permit market or to withhold (at least some of) them in order to reduce total pollution. This proposal tries to overcome the fundamental disadvantage of traditional permit systems which neglect consumer preferences by solely distributing emission permits to producers / polluters. In our system the property right to nature is re-allocated to the households who obtain the opportunity of reducing actual emissions according to their personal preferences by withholding a part or all of the emission permits allotted to them. Such a change in environmental policy would mark a return to the traditional principles of consumer sovereignty by involving households (at least partially) in the social abatement decision process instead of excluding them. Another advantage of admitting households to the TEP market as sellers or buyers of permits is that this increases the number of agents in the permit market and thus significantly reduces the possibilities of strategic market manipulations.
Subjects: 
Environmental policy
tradable emission permits
climate policy
consumer sovereignty
JEL: 
Q28
Q38
D18
Document Type: 
Working Paper

Files in This Item:
File
Size
123.59 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.