A Comparative Analysis of Emissions Trading Systems: Cost Efficiency and Environmental Jurisdictional Authority Overlap

Philip Inyeob Ji, Richard Mulenga, Seema Bogati Bhandari

Research output: Contribution to journalArticlepeer-review

Abstract

This study conducts a comparative analysis of selected emissions trading systems (ETS) by examining them in terms of cost efficiency and jurisdictional authority overlap. Findings show that, the selected allowances markets generally exhibit cost inefficiency as manifested by price volatility. It is also found that ETS environmental jurisdictional overlaps are largely caused by the overly centralized environmental policy regulation. Literature review indicates that practical approaches to mitigating price volatility and jurisdictional authority problems include, among others, linking of ETS jurisdictions as exemplified by the linked California-Quebec ETS, integration of allowances markets, switching from emission-based taxation to consumption-based taxation, and development of the derivatives markets. Streamlining and delegation of environmental laws and judicial reviews are some of the efforts that could help mitigate jurisdictional overlap disputes.

Original languageEnglish
Pages (from-to)173-193
Number of pages21
JournalAsian Journal of Law and Economics
Volume13
Issue number2
DOIs
StatePublished - 1 Aug 2022

Keywords

  • allowances
  • auctions
  • efficiency
  • emissions trading system
  • GHG emissions

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