Regional Carbon Dioxide Permit Trading in the United States: Coalition Choices for Pennsylvania

25 Pages Posted: 21 Feb 2009

See all articles by Adam Rose

Adam Rose

Pennsylvania State University - Department of Geography

Thomas D. Peterson

Center for Climate Strategies

ZhongXiang Zhang

Tianjin University - Ma Yinchu School of Economics

Date Written: February 2006

Abstract

An overview is given of the growing number of regional associations in which states have entered into voluntary arrangements to limit greenhouse gas (GHG) emissions. In particular, in the Regional Greenhouse Gas Initiative (RGGI), a number of northeastern states have joined to create a regional GHG cap and trade program, beginning with the utility industry. Analysis is made of the five key issues relating to these current and potential climate action associations: the extent of the total and individual state mitigation cost-savings across all sectors from potential emission permit trading coalitions; the size of permit markets associated with the various coalitions; the relative advantages of joining various coalitions for swing states such as Pennsylvania; the implications of the exercise of market power in the permit market; and the total and individual state/country cost-savings from extending the coalition beyond US borders. It is shown that overall efficiency gains from trading with a system of flexible state caps, with greater overall cost savings increasing with increasing geographic scope.

Keywords: Regional Greenhouse Gas Initiative, Cap and trade program, Market power in the permit market, Mitigation costs, The size of permit market, Coalition choices for Pennsylvania

JEL Classification: Q52, Q54, Q58, Q48

Suggested Citation

Rose, Adam and Peterson, Thomas D. and Zhang, ZhongXiang, Regional Carbon Dioxide Permit Trading in the United States: Coalition Choices for Pennsylvania (February 2006). Available at SSRN: https://ssrn.com/abstract=1345437 or http://dx.doi.org/10.2139/ssrn.1345437

Adam Rose (Contact Author)

Pennsylvania State University - Department of Geography ( email )

302 Walker Building
University Park, PA 16802
United States

Thomas D. Peterson

Center for Climate Strategies ( email )

1899 L Street, NW
Washington, DC 20036
United States
(202) 540-9121 (Phone)

HOME PAGE: http://www.climatestrategies.us

ZhongXiang Zhang

Tianjin University - Ma Yinchu School of Economics ( email )

92 Weijin Road, Nankai District
Tianjin 300072
China
+86 22 87370560 (Phone)

HOME PAGE: http://ideas.repec.org/f/pzh243.html

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