On the Design of Optimal Grandfathering Schemes for Emission Allowances

摘要: To meet its commitment under the Kyoto Protocol, EU plans to implement an emissions trading system with grandfathering of allowances. Besides having distributional impacts, choice scheme may affect efficiency if firms anticipate how future allocations depend on upcoming decisions. In this paper, we determine central design rules for optimal within a simple two-period model. We find that (small) open systems, where allowance prices are exogenous, first-best second-period schemes must not firm-specific decisions in first period. Second-best correspond Ramsey rule tax differentiation and generally based both previous output. However, closed i.e. endogeneous prices, firstand second-best coincide output levels. They consist assignment proportional period plus term which does either two periods.