Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 17, 2007 erstellt
Description:
This paper develops a model of emissions trading in which industrialized countries can exhibit a level of emissions which is more than their quota by buying emission permits from other industrialized countries (which use less than their quota) or "certified emission reductions" from developing countries. Developing countries can generate these emission reductions by undertaking environmentally beneficial domestic projects. However, no emission quotas are imposed on them. This model is similar to the emissions trading and Clean Development Mechanism (CDM) postulated by the Kyoto Protocol. The important difference is that in the model the developing country itself sells the "emission reductions" carried out in its domestic territory whereas in the CDM it is the industrialized country which invests in an environmentally beneficial project and sells the resulting "emission reductions". The rents generated from the sale of emission credits within the domestic region of a developing country go partially to the country itself in the model but not in the system postulated by the Kyoto Protocol. The obvious conclusion is that the former system generates more incentives for developing countries to undertake positive environmental changes. Detailed results for the framework are spelled out in the paper