New entrant and closure provisions : how do they distort?
Name
2006-013.pdf
Size
100.12 KB
Format
Adobe PDF
Checksum (MD5)
dd05bf43f83e62d032837cecf95779d7
Author(s)
Ellerman, A. Denny
Date Issued
2006
Publisher
MIT Center for Energy and Environmental Policy Research
Series/Report no.
MIT-CEEPR (Series) ; 06-013WP.
Abstract
As a person whose life began in England and ended in North America and who maintained academic affiliations in the United Kingdom, Canada and the U.S., Campbell Watkins had a fine appreciation for the subtle differences that mark the two sides of the North Atlantic. He embodied the cross-fertilization that trans-Atlantic exchanges imply and I have no doubt that that was one of the reasons the IAEE received so much of his attention and benefited so grandly from it. This essay concerns one of those trans-Atlantic exchanges and one of which Campbell would have enjoyed the irony: An American innovation that goes to Europe and becomes bigger than anything yet seen in North America. The transplant is the cap-and-trade form of emissions trading and the European application is the European Union CO2 Emissions Trading Scheme (EU ETS). More specifically, this paper focuses on a particular feature of the allocation process in the European variant, the endowment of new entrants with allowances and the forfeiture of allowances when facilities are closed.
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