Does Distribution Matter? When Flexibility and Pareto-Efficiency in Greenhouse Gas Abatement

Stephan, Gunter; Müller-Fürstenberger, Georg (July 2001). Does Distribution Matter? When Flexibility and Pareto-Efficiency in Greenhouse Gas Abatement (Diskussionsschriften 01-02). Bern: Universität Bern Volkswirtschaftliches Institut

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This paper analyses banking and borrowing of carbon emission rights within the framework of a simple, integrated assessment model. Breaking the world economy in just two regions it will be shown: (1) Increasing when-flexibility in greenhouse gas abatement through banking and borrowing of carbon emission permits has a positive effect on welfare for regions with a poor endowment in carbon emission rights, but negatively affects rich-endowed regions. (2) Intergenerational fairness advocates intertemporal flexibility in greenhouse gas abatement, irrespectively of the initial allocation of carbon right. (3) Changing the degree of whenflexibility has only a small impact on global climate damages. (4) This is in contrast to the observation that the initial allocation of carbon emission rights has a significant impact on atmospheric carbon.

Item Type:

Working Paper

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics > Microeconomics
03 Faculty of Business, Economics and Social Sciences > Department of Economics > Institute of Economics

UniBE Contributor:

Stephan, Gunter and Müller-Fürstenberger, Georg

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

Series:

Diskussionsschriften

Publisher:

Universität Bern Volkswirtschaftliches Institut

Language:

English

Submitter:

Aline Lehnherr

Date Deposited:

15 Apr 2020 11:51

Last Modified:

06 Aug 2020 14:18

JEL Classification:

Q4, F2

BORIS DOI:

10.7892/boris.142427

URI:

https://boris.unibe.ch/id/eprint/142427

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