ausblenden:
Schlagwörter:
Clean Development Mechanism, Import restrictions, Allowability, Green House Gas offset, Abatement
Zusammenfassung:
Introducing discounts on Certified Emission Reductions from the Clean Development Mechanism is often treated as if it only imposed a substitution effect on a firm’s decision between domestic and abroad abatement. Applying a cost minimization approach with a representative firm, I can show that reduced allowability generates a quantity effect in addition to the substitution effect. This quantity effect counteracts the substitution effect for abroad abatement. It may even cause abroad abatement to increase as a result of reduced allowability for Certified Emission Reductions. The results are robust to introducing a secondary market for emission credits, given endogenous prices.
