by Henry D. Jacoby, Mustafa H. Babiker, Sergey Paltsev and John M. Reilly
- This paper develops a technique for endogenously estimating the allowance allocations and associated financial transfers necessary to achieve predetermined distributional outcomes and apply it in the MIT Emissions Prediction and Policy Analysis (EPPA) model. Possible burden sharing agreements are represented by different allowance allocations (and resulting financial flows) in a global cap-and-trade system. Cases studied include agreements that allocate the burden based on simple allocation rules found in current national proposals and alternatives that specify national equity goals for both developing and developed countries. The choice of allocation rule is shown to affect the magnitude of the task and required emissions price because of income effects.
Jacoby, H.D., M.H. Babiker, S. Paltsev and J.M. Reilly (2008). "Sharing the Burden of GHG Reductions." Joint Program Report Series, Report 167, Nov 2008.
