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Tradeable Permits for Global Warming Control: Implications for Regional Economies and Public Utilities

Conference ·
OSTI ID:6007901
 [1];  [2];  [1]
  1. Univ. of Illinois, Chicago, IL (United States)
  2. Argonne National Laboratory (ANL), Argonne, IL (United States)
Difficult policy questions arise in this highly uncertain area of induced climate change. What is a prudent policy given poorly understood damages? Which policies arc cost-effective? Provide incentives for innovation? Harness the information possessed by decentralized (regional) decision makers? Are flexible? And have a good chance of securing international cooperation? We investigate a cumulative emission permit system (CEPS), both within a theoretical and empirical framework. A key feature of this system is that the total volume of emissions leading to the ultimate acceptable gas concentrations is embodied in permits placed on the market immediately. Our analysis of resulting initial and intertemporal permit prices yields strong reasons for ranking this policy above carbon or other taxes, direct regulation, or other measures. Economic theory provides a way to project how regional decision makers, including public utilities, would adjust abatement costs to prices. These implications are tested with a mathematical programming model that provides estimates of global and regional time paths of permit prices, energy use, and trace gas emissions.
Research Organization:
Argonne National Laboratory (ANL), Argonne, IL (United States)
Sponsoring Organization:
USDOE; National Science Foundation (NSF)
DOE Contract Number:
W-31109-ENG-38
OSTI ID:
6007901
Report Number(s):
ANL/CP--72696; CONF-9104106--2; ON: DE91010822
Country of Publication:
United States
Language:
English