Supplementarity : an invitation to monopsony?
Name
MITJPSPGC_Rpt59.pdf
Size
1.32 MB
Format
Adobe PDF
Checksum (MD5)
b51be8489010c75c2523f14dff0e2c80
Alternative Title
Invitation to monopsony?
Date Issued
April 2000
Publisher
MIT Joint Program on the Science and Policy of Global Change
Series/Report no.
Report no. 59
Abstract
Article 17 of the Kyoto Protocol allows Annex B parties to meet their commitments by trading greenhouse gas emissions reductions "supplemental" to domestic emissions control. We demonstrate that implementing supplementarity by imposing concrete ceilings on imports of allowances in a market for tradable emissions rights gives rise to monopsonistic effects, even with price-taking behavior by both buyers and sellers. We assess the importance of this finding for Annex B emissions trading, in the context of the import and export provisions of the recent EU Proposal on supplementarity. Our results show that the proposal would reduce efficiency, and could significantly alter the distribution of the gains from trade in an Annex B tradable permits market.
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. 16).
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