EMISSION PERMITS ALLOCATION, MARKET POWER AND COST-EFFECTIVENESS OF ETS—— A THEORETICAL ANALYSIS

摘要

CO2 emission permits allocation method plays an important role in the cost-effectiveness of ETS fromthe pespective of market power. Our results suggest that grandfathering rule is a better choice, whenthe policy makers want to adopt one kind of free allocation method to attract firms to participate in theETS at the early time. And auctioning rule would be suggested when the ETS is well developed.