A New Approach to Mitigate Co2 Emission from Electric Utility Under Liability Rules
11 Pages Posted: 25 Aug 2000
In the presence of emission level standards along with permit market regulations, if Kyoto Protocol went into force, a part of needed emission reduction will take place domestically. Burden sharing approach through piecemeal operation will result a greater degree of abatement of CO2 emission than will consumer or producer liability laws. It is suggested that consumer will pay compliance cost in terms of price of electricity usage and will receive incentive or rebate for environment preservation per unit of electricity usage. Under the proposed approach, the producers will face the consequences in cases of failing to meet emission standards. In practice, proposed approach will ensure Pareto optimality in both parties' cases and it will preserve the Pareto efficiency.
Keywords: Greenhouse gases, abatement, emission
JEL Classification: D62, E13, Q0
Suggested Citation: Suggested Citation