This paper deals with designing emissions trading in practice. After a short introduction to the general idea of emissions trading, practical requirements for the introduction of an emissions trading scheme are considered, including the temporal and spatial dimension as well as administrative...

There is extreme heterogeneity of firms regulated under the European Emissions Trading Scheme (EU ETS) in terms of emissions evels and employed technology. We present a model that shows that behavior of firms under quantity regulation can differ strongly, dependent on the characteristics of the...