Optimal Opt-In Climate Contracts

Journal of Applied Economics, Vol. 1, pp. 363-384, 1998

Posted: 18 May 2004

See all articles by Juan-Pablo Montero

Juan-Pablo Montero

Massachusetts Institute of Technology (MIT) - Center for Energy and Environmental Policy Research (CEEPR); Pontifical Catholic University of Chile - Institute of Economics

Abstract

The paper studies the design of a treadable permit system with opt-in possibilities for LDCs countries in the context of climate change. In setting the optimal opt-in rule, the regulator faces a trade-off between production efficiency (minimization of control costs) and information rent extraction (reduction of excess permits). Results from simulation exercises based on data from MIT's EPPA Model are also provided.

Suggested Citation

Montero, Juan-Pablo, Optimal Opt-In Climate Contracts. Journal of Applied Economics, Vol. 1, pp. 363-384, 1998, Available at SSRN: https://ssrn.com/abstract=547163

Juan-Pablo Montero (Contact Author)

Massachusetts Institute of Technology (MIT) - Center for Energy and Environmental Policy Research (CEEPR) ( email )

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