Lessons Learned from Three Decades of Experience with Cap-and-Trade

31 Pages Posted: 20 Jan 2016

See all articles by Richard Schmalensee

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Robert N. Stavins

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

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Date Written: November 3, 2015

Abstract

This essay provides an overview of the major emissions trading programs of the past thirty years on which significant documentation exists, and draws a number of important lessons for future applications of this environmental policy instrument. References to a larger number of other emissions trading programs that have been implemented or proposed are included.

Keywords: Market-based instruments, Cap-and-trade, Leaded Gasoline Phasedown, Clean Air Act Amendments of 1990, Sulfur Dioxide, Acid Rain, Carbon Dioxide, Global Climate Change, European Union Emissions Trading System

JEL Classification: Q54, Q58, Q40, Q48

Suggested Citation

Schmalensee, Richard and Stavins, Robert N., Lessons Learned from Three Decades of Experience with Cap-and-Trade (November 3, 2015). FEEM Working Paper No. 107.2015. Available at SSRN: https://ssrn.com/abstract=2718115 or http://dx.doi.org/10.2139/ssrn.2718115

Richard Schmalensee

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

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Robert N. Stavins (Contact Author)

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

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Resources for the Future

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National Bureau of Economic Research (NBER) ( email )

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