THE USE OF TRADABLE PERMITS IN COMBINATION WITH OTHER

0,21

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POLICY INSTRUMENTS

38

stron

4988

ID

Organisation for Economic Co-operation and Development

2003

rok

TABLE OF CONTENTS

EXECUTIVE SUMMARY 4

THE USE OF TRADABLE PERMITS IN COMBINATION WITH OTHER POLICY INSTRUMENTS . 6

Introduction 6

Tradable Permits and Direct Regulation . 7

Using Direct Regulations as the Basis for the Allocation of Tradable Permits. 7

Using Direct Regulations to Generate Tradable Credits . 8

Using Direct Regulations to Protect Local Environmental Conditions under a Tradable Permit

System9

Direct Regulations and Negative New Source Bias under a Tradable Permit System 12

Using Tradable Permits to Increase Regulatory Flexibility and Regulatory Reach 12

Conclusions 13

Tradable Permits and Environmentally Related Taxes . 14

Using Taxes to Reduce Cost Uncertainty 15

Using Taxes to Penalise Non-Compliance 17

Using Taxes to Capture Windfall Rents 18

Conclusions 19

Tradable Permits and Subsidies 20

Tradable Permits and the Incidence of Subsidies 20

Auctioned Tradable Permits and Earmarking of Rents . 21

Tradable Permits, Technology Market Failures and Subsidies . 22

Tradable Permits as a Means of Distributing Subsidies 22

Tax Exemptions and Adherence to Tradable Permit Regimes 23

Conclusions 24

Tradable Permits and Voluntary Approaches . 24

Voluntary Participation in Tradable Permit Systems 25

Tradable Permits as Elements of Voluntary Approaches 27

Accounting for Voluntary Approaches in Permit Allocations and Baseline Estimation. 27

Conclusions 29

Tradable Permits and Tradable Permits 30

Tradable Emission Permits and Tradable Emission Permits . 30

Tradable Emission Permits and Renewable Energy Credits 31

Relative and Absolute Tradable Permit Systems. 31

Conclusions 32

Summary Conclusions and Further Work. 32

REFERENCES 35