Emissions Trading - Economics of International Emissions Trading

Economics of International Emissions Trading

A series on Trade
World trade
Policy
  • Import
  • Export
  • Balance of trade
  • Trade law
  • Trade pact
  • Trade bloc
  • Trade creation
  • Trade diversion
  • Export orientation
  • Import substitution
  • Trade finance
  • Trade facilitation
  • Trade route
  • Domestic trade
  • Tax, tariff and trade
Restrictions
  • Trade barriers
  • Tariffs
  • Non-tariff barriers
  • Import quotas
  • Tariff-rate quotas
  • Quota share
  • Import licenses
  • Customs duties
  • Export subsidies
  • Technical barriers
  • Bribery
  • Exchange rate controls
  • Embargo
  • Safeguards
  • Countervailing duties
  • Anti-dumping duties
  • Voluntary export restraints
History
  • Mercantilism
  • Protectionism
  • Laissez-faire
  • Free trade
  • Economic nationalism
  • Economic integration
Organizations
  • International Monetary Fund
  • International Trade Centre
  • World Trade Organization
  • World Customs Organization
Economic Integration
  • Preferential trading area
  • Free trade area
  • Customs union
  • Single market
  • Economic union
  • Monetary union
  • Fiscal union
  • Customs and monetary union
  • Economic and monetary union
Issues
  • Intellectual property rights
  • Smuggling
  • Competition policy
  • Government procurement
  • Outsourcing
  • Globalization
  • Fair trade
  • Trade justice
  • Emissions trading
  • Trade sanctions
  • War
    • Currency
    • Customs
    • Trade
  • Trade and development
Lists
  • Imports
  • Exports
  • Tariffs
  • Largest consumer markets
  • Leading trade partners
By Country
  • Trade mission
  • Trading nation
  • United States
  • Argentina
  • Pakistan
  • Romania
  • Vietnam
  • India
Theory
  • Comparative advantage
  • Competitive advantage
  • Heckscher–Ohlin model
  • New trade theory
  • Economic geography
  • Intra-industry trade
  • Gravity model of trade
  • Ricardian trade theories
  • Balassa–Samuelson effect
  • Linder hypothesis
  • Leontief paradox
  • Lerner symmetry theorem
  • Terms of trade

It is possible for a country to reduce emissions using a Command-Control approach, such as regulation, direct and indirect taxes. The cost of that approach differs between countries because the Marginal Abatement Cost Curve (MAC) — the cost of eliminating an additional unit of pollution — differs by country. It might cost China $2 to eliminate a ton of CO2, but it would probably cost Norway or the U.S. much more. International emissions-trading markets were created precisely to exploit differing MACs.

Read more about this topic:  Emissions Trading

Famous quotes containing the words economics of, economics and/or trading:

    “The new sound-sphere is global. It ripples at great speed across languages, ideologies, frontiers and races.... The economics of this musical esperanto is staggering. Rock and pop breed concentric worlds of fashion, setting and life-style. Popular music has brought with it sociologies of private and public manner, of group solidarity. The politics of Eden come loud.”
    —George Steiner (b. 1929)

    “There is no such thing as a free lunch.”
    —Anonymous.

    An axiom from economics popular in the 1960s, the words have no known source, though have been dated to the 1840s, when they were used in saloons where snacks were offered to customers. Ascribed to an Italian immigrant outside Grand Central Station, New York, in Alistair Cooke’s America (epilogue, 1973)

    “His farm was “grounds,” and not a farm at all;
    His house among the local sheds and shanties
    Rose like a factor’s at a trading station.”
    —Robert Frost (1874–1963)