A Review of Carbon Market Policies and Research

Larson, Donald F.; Ambrosi, Philippe; Dinar, Ariel; Rahman, Shaikh Mahfuzur; Entler, Rebecca

doi:10.1561/101.00000016

Cited by 14 publications

(10 citation statements)

References 147 publications

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“…For an early assessment of the ETS, see the volume edited by Ellerman, Buchner and Carraro [1]. For more on carbon markets in general, see Larson et al [17].…”

Section: Eu Emissions Trading Schemementioning

confidence: 99%

Short Term Electric Production Technology Switching Under Carbon Cap and Trade

Considine

Larson

2012

Energies

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This study examines fuel switching in electricity production following the introduction of the European Union's Emissions Trading System (EU ETS) for greenhouse gas emissions. A short-run restricted cost equation is estimated with carbon permits, high-carbon fuels, and low carbon fuels as variable inputs. Shadow values and substitution elasticities for carbon-free energy resources from nuclear, hydroelectric and renewable sources are imputed from the cost equation. The empirical analysis examines 12 European countries using monthly data on fuel use, prices, and electricity generation during the first phase of the European Emissions Trading System. Despite low emission permit prices, this study finds statistically significant substitution between fossil fuels and carbon free sources of energy for electric power production. Significant substitution between fossil fuels and nuclear energy also was found. Still, while 18 of the 20 substitution elasticities are statistically significant, they are all less than unity, consistent with limited substitution. Overall, these results suggest that prices for carbon emission permits relative to prices for carbon and carbon free sources of energy do matter but that electric power producers have limited operational flexibility in the short-run to satisfy greenhouse gas emission limits.

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“…For an early assessment of the ETS, see the volume edited by Ellerman, Buchner and Carraro [1]. For more on carbon markets in general, see Larson et al [17].…”

Section: Eu Emissions Trading Schemementioning

confidence: 99%

Short Term Electric Production Technology Switching Under Carbon Cap and Trade

Considine

Larson

2012

Energies

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“…The appropriate roles for land-use projects in international mitigation efforts were contentiously debated as the Kyoto Protocol and the Clean Development Mechanism were crafted (Larson et al 2008). And, in the rules that eventually emerged, the projects faced special limitations, in large part because of the nature of land-use mitigation.…”

Section: Land-use Projectsmentioning

confidence: 99%

Clean Development Mechanism agricultural methodologies could help California to achieve AB 32 goals

Dinar¹,

Larson²,

Frisbie³

2012

Cal Ag

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California Assembly Bill 32 (AB 32), passed in 2006, mandates reductions in California's greenhouse gas emissions to 1990 levels by 2020. Charged with implementing the bill, the California Air Resources Board has identified emission reduction strategies, including nine for agriculture. The goals set for agriculture are voluntary, but because the agricultural sector represents a significant portion of both the state's economy and its greenhouse gas emissions, it offers considerable opportunities for mitigation activities. To reduce compliance costs, the Board's plan includes a cap-and-trade program that allows for offsets to be purchased from nonregulated firms that undertake mitigation in or outside the state. However, methodologies are needed to assess the impact of mitigating activities. Without them, emission reductions are expected to fall far short of potential. We review an existing international mechanismthe Kyoto Protocol's Clean Development Mechanism (CDM) -that offers a framework for evaluating offset projects and advanced methodologies that could facilitate AB 32 implementation in California.

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“…3 As set out in Article 17 of the Kyoto Protocol, Annex B countries with fewer emissions than permitted are allowed to sell the excess AAUs to the countries with more emissions than permitted. 4 See Larson et al (2008) for a discussion of CDM implementation rules and the CDM project cycle. as a motive for investment is less well understood.…”

Section: Introductionmentioning

confidence: 99%

Costs of Greenhouse Gas Emissions Abatement Under the Clean Development Mechanism

2015

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This paper examines the costs of emissions abatement through various types of projects financed under the Clean Development Mechanism (CDM) of the Kyoto Protocol. Using project data, cost functions are estimated applying alternative functional forms. Results show that the average cost of abatement decreases with the volume of abatement, showing economies of scale and suggesting that reducing emissions through small projects is relatively expensive. Results also show significant variation in the costs of abatement by project type and location. Nevertheless, the observed distribution of project investments does not closely match the relative cost structure, either by location or project type. Renewable energy projects accounted for 62% of the projects even though they had the second highest cost. Most of the CDM projects are located in emerging economies, principally China, India, and Brazil, even though the fixed costs of establishing CDM projects in these countries are higher than in many other developing countries. Significantly, while much of the conceptual and applied numerical literature concerning greenhouse gas abatement policies relies on presumptions about the structure of abatement cost curves, these findings suggest that comparative advantage is only one of several factors driving CDM investments and that investors hold additional preferences about project location and project type. Finally, results indicate a general, though noncontinuous, downward trend in the costs of abatement for new CDM projects.

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A Review of Carbon Market Policies and Research

Cited by 14 publications

References 147 publications

Short Term Electric Production Technology Switching Under Carbon Cap and Trade

Short Term Electric Production Technology Switching Under Carbon Cap and Trade

Clean Development Mechanism agricultural methodologies could help California to achieve AB 32 goals

Costs of Greenhouse Gas Emissions Abatement Under the Clean Development Mechanism

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