Help Privacy Policy Disclaimer
  Advanced SearchBrowse





Reduced Allowability and the Allocation of Emission Abatement


Aresin,  Sabine
Public Economics, MPI for Tax Law and Public Finance, Max Planck Society;

External Resource
Fulltext (restricted access)
There are currently no full texts shared for your IP range.
Fulltext (public)
There are no public fulltexts stored in PuRe
Supplementary Material (public)
There is no public supplementary material available

Aresin, S. (2015). Reduced Allowability and the Allocation of Emission Abatement. Working Paper of the Max Planck Institute for Tax Law and Public Finance, No. 2015-12.

Cite as: https://hdl.handle.net/11858/00-001M-0000-0029-7AEC-5
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.