Regulators around the world are currently considering national emissions trading systems (ETS) as a cost-effective way to reduce greenhouse gas emissions. ETS installations coverage is one of the numerous design issues confronting them. ‘Blanket coverage’ that includes all an economy’s...

Trading schemes for emission allowances have become a panacea for nations aspiring to reduce their aggregate emissions of greenhouse gases from industry in a cost-effective manner. The contention of this paper is that an emissions trading scheme (ETS) should not be based on blanket coverage of...

There has now been almost two decades of natural resource management by signatory states under the Murray-Darling Basin Agreement Despite significant public expense, the success of initiatives to improve the Basin’s environmental remains ambiguous. This confusion is partly due to poorly...

There has now been almost two decades of natural resource management by signatory states under the Murray-Darling Basin Agreement Despite significant public expense, the success of initiatives to improve the Basin’s environmental remains ambiguous. This confusion is partly due to poorly...

An Additional Action Reserve (AAR) is proposed as a mechanism to allow for initiatives by government and voluntary private interests to make additional emissions reductions beyond a nationally set cap. The key idea of the AAR is to annually set aside a proportion of the Australian Emission Units...

This paper investigates the behavioural implications of penalty designs on market performance using an experimental method. Three penalty types and two penalty levels are enforced in a laboratory permit market with auctioning, including the Australian Carbon Pollution Reduction Scheme proposed...

This paper employs a theoretical model to examine compliance incentives and market efficiency under three penalty types: the fixed penalty rate, which uses a constant marginal financial penalty; the make-good provision (quantity penalty), where each missing permit in the current period is to be...

Allocating permits based on individual historical emissions (‘grandfathering’), or industry benchmark data, is an important design aspect of an emissions trading scheme. Free permit allocation has proven complex and inefficient (particularly in the European Union) with distribution...

A detailed proposal for an economy-wide emissions trading scheme in Australia was tabled by the government in December 2008 with a proposed start date for mid-2010. The government proposes unilateral linking, with no initial bilateral linkages, through the clean development mechanism and joint...

We analyse the efficiency effects of the initial permit allocation given to firms with market power in both permit and output market. We examine two models: a long-run model with endogenous technology and capacity choice, and a short-run model with fixed technology and capacity. In the long run,...