Terminating links between emission trading programs

Journal Article (Journal Article)

Links between emission trading programs are not immutable, as highlighted by New Jersey's exit from the Regional Greenhouse Gas Initiative in 2011. This raises the question of what to do with existing permits that are banked for future use-choices that have consequences for market behavior in advance of, or upon speculation about, delinking. We consider two delinking policies. One differentiates banked permits by origin, the other treats banked permits the same. We describe the price behavior and relative cost-effectiveness of each policy. Treating permits differently generally leads to higher costs, and may lead to price divergence, even with only speculation about delinking.

Full Text

Duke Authors

Cited Authors

  • Pizer, WA; Yates, AJ

Published Date

  • May 1, 2015

Published In

Volume / Issue

  • 71 /

Start / End Page

  • 142 - 159

Electronic International Standard Serial Number (EISSN)

  • 1096-0449

International Standard Serial Number (ISSN)

  • 0095-0696

Digital Object Identifier (DOI)

  • 10.1016/j.jeem.2015.03.003

Citation Source

  • Scopus