On the other hand, a flexible price reduces the financial burden on firms during recessions. The paper looks at ways to have the best of both worlds in the most effective manner.
Thursday, June 2, 2011
Price Floors in Emissions Trading to Reduce Policy Related Investment Risks: an Australian View
Frank Jotzo and Steve Hatfield-Dodds have a new CCEP working paper tiled: Price Floors in Emissions Trading to Reduce Policy Related Investment Risks: an Australian View, which is about the role of a price floor in a carbon emissions trading scheme in increasing the certainty of the investment environment. One of the downsides to emissions permit trading is that permit prices can be very volatile. This chart shows the EU ETS permit prices from just before the global financial crisis until later 2010:
On the other hand, a flexible price reduces the financial burden on firms during recessions. The paper looks at ways to have the best of both worlds in the most effective manner.
On the other hand, a flexible price reduces the financial burden on firms during recessions. The paper looks at ways to have the best of both worlds in the most effective manner.
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