Intertemporal flexibility in a tradeable CO_2 quota system

摘要

The paper compares the total costs of abating CO_2 emissions in two dif- ferent intertemporal trading systems. In addition, the paper gives an analysis of how abatement costs are distributed among different countries/regions. It is shown that the total cost of implementing a climate treaty is considerably reduced in a system where both banking and borrowing of quotas are allowed compared to a system where quotas only can be banked.