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Absolute vs. Intensity-Based Emission Caps

As governments begin to consider regulation of greenhouse gases, many are turning to market-based initiatives. Such programs assign emitters a certain share of emissions, and allow them to trade for emissions rights in a market. Emission shares can be distributed strictly as a certain amount of carbon, or they can be assigned as a certain amount of pollutant per unit output or input. This paper compares the two methods of regulation in the specific area of regulating greenhouse gases, and provides a theoretical economic analysis of their effects.

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Description As governments begin to consider regulation of greenhouse gases, many are turning to market-based initiatives. Such programs assign emitters a certain share of emissions, and allow them to trade for emissions rights in a market. Emission shares can be distributed strictly as a certain amount of carbon, or they can be assigned as a certain amount of pollutant per unit output or input. This paper compares the two methods of regulation in the specific area of regulating greenhouse gases, and provides a theoretical economic analysis of their effects.
Classification
Date Issued 2003
Format
Subject
Source Massachusetts Institute of technology/Laboratory for Energy and the Environment
Keyword Policy; Economics
Selector Conlin
Date Of Record Creation 2004-04-08 08:22:52
Education Level
Date Last Modified 2008-08-27 14:01:00
Creator Ellerman, A. Denny; Sue Wing, Ian.
Language EN
Date Record Checked: 2004-04-08 00:00:00 (W3C-DTF)

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