A Meaningful U.S. Cap-and-Trade System to Address Climate Change

91 Pages Posted: 14 Oct 2008  

Robert N. Stavins

Harvard University - Harvard Kennedy School (HKS); Resources for the Future; National Bureau of Economic Research (NBER)

Date Written: October 9, 2008

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. In this article, I propose and analyze a scientifically sound, economically rational, and politically feasible approach for the United States to reduce its contributions to the increase in atmospheric concentrations of greenhouse gases. The proposal features an up-stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions over time, and includes mechanisms to reduce cost uncertainty. I compare the proposed system with frequently discussed alternatives. In addition, I describe common objections to a cap-and-trade approach to the problem, and provide responses to these objections.

Keywords: Cap-and-Trade System, Carbon Dioxide, Greenhouse Gas Emissions, Global Climate Change, Carbon Taxes

JEL Classification: Q540, Q280, Q380, Q480, Q580

Suggested Citation

Stavins, Robert N., A Meaningful U.S. Cap-and-Trade System to Address Climate Change (October 9, 2008). FEEM Working Paper No. 82.2008. Available at SSRN: https://ssrn.com/abstract=1281518 or http://dx.doi.org/10.2139/ssrn.1281518

Robert N. Stavins (Contact Author)

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1820 (Phone)
617-496-3783 (Fax)

Resources for the Future

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Washington, DC 20036
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National Bureau of Economic Research (NBER) ( email )

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