November 15, 2010

REDD in the Carbon Market: A General Equilibrium Analysis

by Francesco Bosello, Fabio Eboli, Ramiro Parrado and Renato Rosa

- In this paper we analyze the impact of introducing avoided deforestation credits into the European carbon market using a multiregional Computable General Equilibrium model. Taking into account political concerns over a possible "flooding" of REDD credits, various limits to the number of REDD allowances entering the carbon market are considered. Finally, unlike previous studies, we account for both direct and indirect effects occurring on land and timber markets resulting from lower deforestation rates.

Bosello, F., F. Eboli, R. Parrado and R. Rosa (2010). "REDD in the Carbon Market: A General Equilibrium Analysis." FEEM Note di lavoro No. 2010.142, Nov 2010.