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Cap-and-Trade Properties under Different Scheme Designs

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dc.contributor.author Taschini, Luca
dc.contributor.author Grüll, Georg
dc.date.accessioned 2010-02-11T18:03:59Z
dc.date.available 2010-02-11T18:03:59Z
dc.date.issued 2009-11
dc.identifier.other 2009-019
dc.identifier.uri http://hdl.handle.net/1721.1/51718
dc.description.abstract This paper examines the key design mechanisms of existing and proposed cap-and-trade markets. First, it is shown that the hybrid systems under investigation (safety-valve with offsets, price floor using a subsidy, price collar, allowance reserve, and options offered by the regulator) can be decomposed into a combination of an ordinary cap-and-trade scheme with European- or American-style call and put options. Then, we quantify and discuss the advantages and disadvantages of the proposed hybrid schemes by investigating whether pre-set objectives (enforcement of permit price bounds and reduction of potential costs for relevant companies) can be accomplished while maintaining the original environmental targets. en
dc.description.sponsorship Massachusetts Institute of Technology. Center for Energy and Environmental Policy Research. en
dc.language.iso en_US en
dc.publisher MIT Center for Energy and Environmental Policy Research en
dc.relation.ispartofseries MIT-CEEPR (Series);2009-019
dc.title Cap-and-Trade Properties under Different Scheme Designs en
dc.type Working Paper en


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