{"id":19760,"date":"2016-11-01T09:31:14","date_gmt":"2016-11-01T09:31:14","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&#038;p=19760"},"modified":"2024-08-19T14:28:24","modified_gmt":"2024-08-19T13:28:24","slug":"emissions-trading-systems-with-cap-adjustments","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/emissions-trading-systems-with-cap-adjustments\/","title":{"rendered":"Emissions trading systems with cap adjustments"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>Emissions Trading Systems with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits due to changes in the state of the regulated economy. We propose a mechanism which adjusts the allocation of permits based on the current bank of permits. The mechanism spans the spectrum between a pure quantity instrument and a pure price instrument. We solve the firms&rsquo; emissions control problem and obtain an explicit dependency between the key policy stringency parameter &ndash; the adjustment rate &ndash; and the firms&rsquo; abatement and trading strategies. We present an analytical tool for selecting the optimal adjustment rate under both risk-neutrality and risk-aversion, which provides an analytical basis for the regulator&rsquo;s choice of a responsive ETS policy.<\/p>\n<p><strong>Sascha Kollenberga and Luca Taschini, In: <em>Journal of Environmental Economics and Management, <\/em>2016.<\/strong><em><br>\n<\/em><\/p>\n\n","protected":false},"excerpt":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>Emissions Trading Systems (ETSs) with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits in response to economic shocks. This paper proposes a new mechanism which adjusts the allocation of permits based on the current bank of permits to create a dynamic system of permit allocation. <\/p>\n\n","protected":false},"author":12,"featured_media":0,"template":"","tags":[694,693,695,697,696,480,698],"publication-type":[436],"topic_area":[4694],"class_list":["post-19760","publication","type-publication","status-publish","hentry","tag-dynamic-allocation","tag-eu-ets-reform","tag-policy-design","tag-resilience","tag-responsiveness","tag-risk-aversion","tag-supply-management-mechanism","publication-type-research-articles","topic_area-policy-evaluation"],"acf":{"exclude_from_sync":{"ref_value":"field_560538b0e7350","value":"0","type":false,"post_type":""},"downloads":{"ref_value":"field_52f16cc1a80f2","value":false,"type":"repeater","post_type":""},"rss_newsletter":{"ref_value":"field_54f5c2c1544d8","value":"","type":false,"post_type":""},"profile_link":{"ref_value":"field_52f164b5189e9","value":["sascha-kollenberg","luca-taschini"],"type":"relationship","post_type":"profile"},"article_link":{"ref_value":"field_52eee3c7f0586","value":"https:\/\/www.sciencedirect.com\/science\/article\/pii\/S0095069616302601","type":false,"post_type":""},"article_link_title":{"ref_value":"field_5322399d89d42","value":"External link to publisher","type":false,"post_type":""},"spotlight":{"ref_value":"field_52f80896506d3","value":"","type":false,"post_type":""}},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Emissions trading systems with cap adjustments - Grantham Research Institute on climate change and the environment<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/emissions-trading-systems-with-cap-adjustments\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Emissions trading systems with cap adjustments - Grantham Research Institute on climate change and the environment\" \/>\n<meta property=\"og:description\" content=\"Emissions Trading Systems (ETSs) with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits in response to economic shocks. This paper proposes a new mechanism which adjusts the allocation of permits based on the current bank of permits to create a dynamic system of permit allocation.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/emissions-trading-systems-with-cap-adjustments\/\" \/>\n<meta property=\"og:site_name\" content=\"Grantham Research Institute on climate change and the environment\" \/>\n<meta property=\"article:modified_time\" content=\"2024-08-19T13:28:24+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication\\\/emissions-trading-systems-with-cap-adjustments\\\/\",\"url\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication\\\/emissions-trading-systems-with-cap-adjustments\\\/\",\"name\":\"Emissions trading systems with cap adjustments - Grantham Research Institute on climate change and the environment\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/#website\"},\"datePublished\":\"2016-11-01T09:31:14+00:00\",\"dateModified\":\"2024-08-19T13:28:24+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication\\\/emissions-trading-systems-with-cap-adjustments\\\/#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication\\\/emissions-trading-systems-with-cap-adjustments\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication\\\/emissions-trading-systems-with-cap-adjustments\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Publications\",\"item\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/?post_type=publication\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"All research\",\"item\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication-type\\\/new-research\\\/\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Research article\",\"item\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/publication-type\\\/research-articles\\\/\"},{\"@type\":\"ListItem\",\"position\":5,\"name\":\"Emissions trading systems with cap adjustments\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/#website\",\"url\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/\",\"name\":\"Grantham Research Institute on climate change and the environment\",\"description\":\"The Grantham Research Institute at LSE carries out world-class research on climate change and the environment.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.lse.ac.uk\\\/granthaminstitute\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Emissions trading systems with cap adjustments - Grantham Research Institute on climate change and the environment","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/emissions-trading-systems-with-cap-adjustments\/","og_locale":"en_GB","og_type":"article","og_title":"Emissions trading systems with cap adjustments - Grantham Research Institute on climate change and the environment","og_description":"Emissions Trading Systems (ETSs) with fixed caps lack provisions to address systematic imbalances in the supply and demand of permits in response to economic shocks. 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