Should I stay or should I go? Carbon leakage and ETS in an evolutionary model

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F61989100%3A27510%2F21%3A10248165" target="_blank" >RIV/61989100:27510/21:10248165 - isvavai.cz</a>
Result on the web
<a href="https://www.sciencedirect.com/science/article/pii/S0140988321004333?via%3Dihub" target="_blank" >https://www.sciencedirect.com/science/article/pii/S0140988321004333?via%3Dihub</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.1016/j.eneco.2021.105561" target="_blank" >10.1016/j.eneco.2021.105561</a>

Result language
angličtina
Original language name
Should I stay or should I go? Carbon leakage and ETS in an evolutionary model
Original language description
Emissions trading is gaining increasing importance around the world as a suitable instrument to address climate change. In the absence of a global carbon market, however, unilateral carbon policies may end up causing carbon leakage effects, the more so if carbon prices are to increase in the future to achieve more ambitious emissions abatement targets. This paper intends to explore the possible delocalization effects of an Emissions Trading System (ETS) by proposing an evolutionary theoretical model in which regulated firms decide whether to stay (keep their production activities in the domestic country) or leave (move production abroad where no ETS is in place) imitating what other firms do. We investigate how this decision is affected by some key ETS design features, such as the emissions cap, the number of allowances granted for free to ETS firms, the level of a floor price for allowances. Numerical simulations show that the firms' decision on whether to abate emissions or relocate abroad are more sensitive to policies that reduce the cost of green technologies than to changes in specific features of the ETS design such as the emissions cap, the floor price and the number of permits granted for free.
Czech name
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Czech description
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Type
J<sub>imp</sub> - Article in a specialist periodical, which is included in the Web of Science database
CEP classification
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OECD FORD branch
50200 - Economics and Business

Project
<a href="/en/project/GA18-13951S" target="_blank" >GA18-13951S: New approaches to financial time series modelling based on soft computing</a><br>
Continuities
P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year
2021
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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