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The merits of non-tradable quotas as a domestic policy instrument to prevent firm closure

Hagem, Cathrine
Working paper
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CICERO_Working_Paper_2001-06.pdf (122.5Kb)
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http://hdl.handle.net/11250/192386
Utgivelsesdato
2001
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  • CICERO Working Papers [167]
Sammendrag
There is a concern in many countries that a domestic tradable quota system for greenhouse gases, where all emitters must pay for their quotas, may lead to closures of emissions-intensive industrial companies. Allocating quotas free of charge to companies operating in competitive markets has been suggested as a means to reduce the likelihood of closures. Two different designs of quota systems are studied within a two-period model: one where the quotas given free of charge are tradable, and one where the quotas are non-tradable. The two quota systems are compared with respect to their ability both to induce the firms to implement investment in abatement technology and to prevent or postpone closures.
Utgiver
CICERO Center for International Climate and Environmental Research - Oslo
Serie
CICERO Working Paper;2001:06

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