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BANKING AND BORROWING IN THE EU ETS: A REVIEW OF ECONOMIC MODELLING, CURRENT PROVISIONS AND PROSPECTS FOR FUTURE DESIGN
Author(s) -
Chevallier Julien
Publication year - 2012
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/j.1467-6419.2010.00642.x
Subject(s) - emissions trading , flexibility (engineering) , context (archaeology) , european union , economics , international economics , macroeconomics , greenhouse gas , ecology , paleontology , management , biology
This paper deals with the issue of banking and borrowing in the context of the European Union Emissions Trading Scheme (EU ETS) by attempting to provide a policy‐oriented unifying theoretical framework. After describing the main features of the EU ETS, the core part of the paper consists of variations of an intertemporal continuous time optimization model. Additional elements include flexibility measures currently discussed and proposed in other emissions trading systems (USA, Australia), which include the use of safety valves, minimum price auctioning or offsets from domestic or international projects.