The safety valve and climate policy
Name
MITJPSPGC_Rpt83.pdf
Size
261.24 KB
Format
Adobe PDF
Checksum (MD5)
0346490fc38bb34245c33e8595dca452
Date Issued
February 2002
Publisher
MIT Joint Program on the Science and Policy of Global Change
Series/Report no.
Report no. 83
Abstract
In discussions of a cap-and-trade system for implementation of Kyoto Protocol-type quantity targets, a "safety valve" was proposed where, by government sales of emissions permits at a fixed price, the marginal cost of the effort could be limited to a predetermined level. The advantages seen for such a hybrid system included the shifting of the Kyoto architecture toward a price-based system, and the blunting of opposition to the Protocol on the basis of anticipated high cost. This paper reviews the theoretical underpinnings of the preference for a price instrument for controlling stock pollutants like greenhouse gases, and summarizes the arguments supporting and opposing the safety valve idea within the policy debate. If, in the face of uncertainty, emissions are to be limited to a fixed quantity target, then some means needs to be provided to avoid complete inflexibility. A safety valve can serve this function, although similar advantages can be achieved by the phasing in of quantity targets, coupled with provision for banking and borrowing.
Description
Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change Website. (http://mit.edu/globalchange/www/)
Includes bibliographical references (p. 11).
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