Oxford Review of Economic Policy volume 24, issue 2, P298-321 2008 DOI: 10.1093/oxrep/grn017 View full text
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R. N. Stavins

Abstract: There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an upstream , economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO2 greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being au…

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