Addressing Climate Change with a Comprehensive Us Cap-and-Trade System

Posted: 7 Nov 2008

See all articles by Robert N. Stavins

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

Date Written: Summer 2008

Abstract

There is growing impetus for a domestic US climate policy that can provide meaningful reductions in emissions of carbon dioxide (CO) and other greenhouse gases. I describe and analyse an up-stream, economy-wide CO cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 per cent over 25 years. The system provides for linkage with emission-reduction credit projects in other countries, harmonization over time with effective cap-and-trade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products.

Keywords: cap-and-trade system, carbon dioxide, greenhouse gas emissions, global climate change, carbon taxes, Q540, Q280, Q380, Q480, Q580

Suggested Citation

Stavins, Robert N., Addressing Climate Change with a Comprehensive Us Cap-and-Trade System (Summer 2008). Oxford Review of Economic Policy, Vol. 24, No. 2, pp. 298-321, 2008, Available at SSRN: https://ssrn.com/abstract=1297156 or http://dx.doi.org/grn017

Robert N. Stavins (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1820 (Phone)
617-496-3783 (Fax)

Resources for the Future

1616 P Street, NW
Washington, DC 20036
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
408
PlumX Metrics