State and Trends of the Carbon Market 2004

Lecocq, Franck

doi:10.1596/0-8213-6117-1

Cited by 67 publications

(60 citation statements)

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“…Emissions allowance units traded in the EU-ETS currently realize substantially higher prices than CDM CERs. This is due to the uncertainties related to CERs and to the only partial link between EU-ETS and the Kyoto mechanisms (Lecocq and Capoor 2005). For the long-run and when clear rules are established, I assume similar prices and refrain from discerning separate markets in the following.…”

Section: Rents In the Cdmmentioning

confidence: 99%

How to make the clean development mechanism sustainable—The potential of rent extraction

Müller

2007

Energy Policy

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Abstract:The Clean Development Mechanism (CDM) should foster sustainable development and greenhouse gas emissions reductions. The design of the CDM and first experience suggest that it may not achieve these goals. Developing countries hosting CDM projects may loose cheap emissions reduction possibilities for their own future use, and sustainable development and technology transfer may not take place. On the other hand, the CDM has the potential to generate considerable rents if permit prices are high or costs low. A deliberate decision on how to distribute these rents should be taken and the potential failure of the CDM in meeting its goals calls for further regulation. I suggest to combine these two issues and to extract the rents by a profit tax. The tax revenues could contribute to national sustainable development strategies, to offset external costs imposed by CDM projects and to extract part of the resource rent they may generate. The international character of the CDM offers a frame for internationally coordinated tax design. This would hedge against a potential race to the bottom.

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Section: Rents In the Cdmmentioning

confidence: 99%

How to make the clean development mechanism sustainable—The potential of rent extraction

Müller

2007

Energy Policy

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“…The project-based emissions trading for pre-Kyoto compliance by far is the largest CO 2 market (Lecocq and Capoor, 2003). The Kyoto Protocol provides the main impetus behind project-based trades, which in addition to domestic and international emissions trading under cap and trade schemes is another option for reducing greenhouse gas emissions that count towards an emissions target.…”

Section: Project-based Emissions Tradingmentioning

confidence: 99%

Market failures, consumer preferences, and transaction costs inenergy efficiency purchase decisions

Sathaye¹,

Murtishaw²

2004

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Several factors limit the energy savings potential and increase the costs of energyefficient technologies to consumers. These factors may usefully be placed into two categories; one category is what economists would define as market failures and the other is related to consumer preferences. This paper provides a conceptual framework for understanding the roles of these factors, and develops a methodology to quantify their effects on costs and potentials of two energy efficient end uses -residential lighting and clothes washers. It notes the significant roles played by the high implicit cost of obtaining information about the benefits of the two technologies and the apparent inability to process and utilize information. For compact fluorescent lamps, this report finds a conservative estimate of the cost of conserved energy of 3.1 cents per kWh. For clothes washers, including water savings reduces the cost of conserved energy from 13.6 cents to 4.3 cents per equivalent kWh. Despite these benefits, market share remains low. About 18 million tons of CO 2 could be saved cost effectively from 2005 sales of these two technologies alone. The paper also notes that trading of carbon emissions will incur transaction costs that will range from less than 10 cents per metric ton of CO 2 for larger size projects and programs to a few dollars per metric ton of carbon for the smaller ones. Executive SummaryTwo general approaches have been used for the assessment of energy demand and supply -the so-called "bottom-up" and "top-down" approaches. The bottom-up approach focuses on individual technologies for delivering energy services, such as household durable goods and industrial process technologies. The top-down method assumes a general equilibrium or macroeconomic perspective, wherein costs are defined in terms of changes in economic output, income, or GDP, typically from the imposition of energy or emissions taxes.The bottom-up approach assumes that various factors prevent consumers from taking actions that would be in their private self-interest, that is, would result in the provision of energy services at lower cost. These factors include lack of information about energy efficiency opportunities, lack of access to capital to finance energy efficiency investment, misplaced incentives which separate responsibilities for making capital investments and paying operating costs, hidden costs, transaction costs, bounded rationality, and product unavailability.The thrust of this work thus focuses on the development of a bottom-up approach that (1) accounts for all costs of a mitigation option, including non-energy and transaction costs, and (2) allows for representation of the impact of each factor on a cost component and/or the penetration level of a mitigation option. We focus on energy efficiency options and the representation of their marginal cost curves, typically referred to as cost of conserved energy (CCE) curves, using the costs and benefits faced by consumers.We illustrate the use of our factors approach by demonstr...

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“…First, as countries enter into commitments to balance their emissions, this carbon could acquire cash value. During 2003, 78 million tons of carbon were traded in transactions that probably totalled about $330 million (Lecocq 2004). This is still a very small fraction of the global carbon pool.…”

Section: Introductionmentioning

confidence: 99%

“…Prices are anyway highly variable, as Lecocq (2004) explains; although maximum prices exceed $6 per ton CO 2 , the carbon bought may not eventually be certifiable, and the price depends in part on who agrees to bear that risk. Moreover, where projects are not Kyoto-compliant, buyers pay less; and although agricultural sinks may be eligible under Kyoto from 2012, this is uncertain.…”

Section: Introductionmentioning

confidence: 99%

“…Moreover, where projects are not Kyoto-compliant, buyers pay less; and although agricultural sinks may be eligible under Kyoto from 2012, this is uncertain. But even non-compliant projects average $1.34 per ton of CO 2 ; and it is likely that compliant and non-compliant trading systems will eventually become linked (Lecocq 2004), adding value even to non-compliant emissions reductions. This is prevalent more now that the EU has adopted a linking directive between the European carbon market and the Kyoto flexible instruments.…”

Section: Introductionmentioning

confidence: 99%

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Agricultural sinks in the developing world: Different disciplines and different perspectives

Robbins

2005

Environmental Sciences

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Agriculture is historically a source of atmospheric carbon. With the best management practices, this could be partly reversed, with a potential increase in size of the soil carbon pool that would have significant impact as a measure to mitigate climate change. This might benefit farmers twice over, as the carbon has a cash value, while the soil organic matter that contains it will assist productivity. There is therefore a business opportunity in carbon payments for farmers in the developed world. However, this article considers whether such payments might alleviate rural poverty and fund agricultural development in low-income countries. They might do so, but badly designed projects could lead to emission rather than sequestration, accompanied by productivity losses. Prevention of such perverse outcomes requires a multidisciplinary approach and an awareness of the political ecology context of sinks projects. An appropriate methodology is needed for the evaluation of soil carbon projects in developing countries.

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State and Trends of the Carbon Market 2004

Cited by 67 publications

References 0 publications

How to make the clean development mechanism sustainable—The potential of rent extraction

How to make the clean development mechanism sustainable—The potential of rent extraction

Market failures, consumer preferences, and transaction costs inenergy efficiency purchase decisions

Agricultural sinks in the developing world: Different disciplines and different perspectives

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