Can Sectoral Agreements and Output Based Allocation Address Leakage?

1. cs_paris_eu-ets_070706.pdf

Author Michael Colombier and Karsten Neuhoff
Type Final
Date 06 Jul 2007

The authors report that where leakage concerns are strong, voluntary sectoral agreements are unlikely to succeed. If sectoral agreements increase the confidence of market participants that CO2 prices will be internalised, then it can address many of the leakage effects.

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