The paper “Second and Third Party Punishment under Costly Monitoring Research Paper” by Timo Goeschl and Johannes Jarke has been accepted for publication by the Journal of Economic Psychology.

The paper “Group Size and the (In)Efficiency of Pure Public Goods Provision” by Johannes Diederich, Timo Goeschl, and Israel Waichman has been accepted for publication in the European Economic Review.

The paper “The Climate Policy Hold-Up” by Timo Goeschl and Grischa Perino has been accepted for publication in the Scandinavian Journal of Economics.

The paper “The Sopranos Redux: The Empirical Economics of Waste Crime” by Christian Almer and Timo Goeschl has been published in the most recent issue of Regional Studies.



Dr. Daniel Heyen has left the Research Center for Environmental Economics to take up a prestigious DFG-Fellowship at the Grantham Research Institute for Climate Research and the Environment, London School of Economics



Das neue Programm der öffentlichen Reihe "Heidelberger Brücke" des HCE für ist da. Sie finden das Programm hier.



The next  FZU-ZEW EnvEcon Monthly Brownbag will take place Tuesday, April 19th, 12:30 to 14:00 at the ZEW, room 1, L7,1 68161 Mannheim

Title: Limited Trading of Emissions Permits as a Climate Cooperation Mechanism? US-China and EU-China Examples

Presenter: Claire Gavard (ZEW)


The recent negotiations of the United Nations Framework Convention on Climate Change (UNFCCC), and in particular the Paris agreement adopted at the 21st  Conference of the Parties (COP21), have underlined the importance of international cooperation and the need for support from developed to developing countries to address climate change. This raises the question of whether carbon market linkages could be used as a cooperation mechanism. Previous studies have examined sectoral trading, a market mechanism considered to replace the Clean Development Mechanism (CDM). Sectoral trading involves coupling carbon market for one or more sectors in a developing country with an emissions trading system (ETS) in a developed region. Policy discussions surrounding such linkages have indicated that, should they operate, a limit would be set on the amount of carbon permits that could be imported by developed regions from developing countries. This paper analyzes the impact of limited carbon trading between an ETS in the EU or the US and a carbon market covering Chinese electricity and energy intensive sectors. The study employs the MIT Emissions Prediction and Policy Analysis (EPPA) model. The emissions reduction constraints for each of the three regions are in line with the Nationally Determined Contributions announced in Paris. We find that if the amount of permits that can be imported from China to Europe is 10% of the total amount of European allowances, relative to a case with no international permit trading, the European carbon price decreases by 31%, while it decreases by 59% in the absence of limit. 

In the US-China case, again relative to a case without international permit trading, the US carbon price is reduced by 37% if trading is similarly limited and by 70% if it is not. As a consequence, limited carbon trading does not reverse the changes initiated in the EU or the US constrained sectors as much as unlimited trading would. While China does not benefit from unlimited carbon trading with the EU or the US, we find that, if China captures the rents associated with limited permit trading, it is possible to find a limit threshold that makes both regions better off relative to when there is no international trade in carbon Permits.


All interested persons are welcome!



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