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Equity criterion for initial rights CO2 emissions allocations under emissions trading: cooperation or conflict among nations?

Published online by Cambridge University Press:  05 September 2014

Je-Liang Liou  and
Pei-Ing Wu
Je-Liang Liou
Affiliation:
The Center for Green Economy, Chung-Hua Institution for Economic Research, Taiwan. E-mail: [email protected]
Pei-Ing Wu
Affiliation:
Department of Agricultural Economics, National Taiwan University, No. 1 Section 4 Roosevelt Road, Taipei 106, Taiwan. Tel: +886-2-3366-2663. E-mail: [email protected]
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Abstract

This study constructs comprehensive operational equitable initial rights of emissions allocation models by estimating the total abatement cost based on the criteria of egalitarianism, sovereignty, the ability to pay, polluter pays and various scenarios of the Greenhouse Development Rights (GDRs) framework among groups of countries or individual nations. The analyses provide the potential crux regarding the agreements, cooperation and/or conflict among nations for joining the trading. The results show that the polluter pays principle generates the greatest total abatement cost saving for upper-middle and low-middle income nations, but not for others. Full capacity GDRs apply to China, egalitarianism to India and sovereignty to the United States on an individual basis. The results show that the disagreement and gaps with regard to an equitable initial allocation of rights among groups or individual nations is one of the possible obstructions and hindrances to the promotion and formation of a world trading scheme.

Type
Research Article
Information
Environment and Development Economics , Volume 20 , Issue 5 , October 2015 , pp. 587 - 610
Copyright
Copyright © Cambridge University Press 2014 

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