Economics Carbon trading US

Just another brother from the Wu hood

Jim Tseng

CARBON TRADING SCHEME IN THE U.S

Background Information: Carbon TradeAbstained from the Kyoto Protocol.Companies may choose (voluntary)

dukespace.lib.duke.edu

Market FailureCost of pollution is no cost!Negative Externality for the third party.

Chicago Climate Exchange (CCX)Voluntary binding commitment Cut back emission production by 6% below

the baseline at the end of 2010Certain standard of emissionsMembers who exceed the allowance will

have to buy carbon allowance.Transparent processtax

Ford MotorsCar industryEmissions by production and consumptionOne of the first automobile companies to

joinFord recently was the first automaker to

submit a voluntary GHG report in China for its Chang An Ford Mazda Automobile Co., Ltd. facility in Chongqing, China.

Proposed Remedy

4 policies CO2

1. utilize the traditional EPA command-and-control policy

2. Encourage Asian Pacific PartnershipEncourage voluntary measures

3. Utilize Cap & Trade Approach

4. National carbon tax Political non-starter in the US

Command-and-control potentially enormous economic inefficiencies

Stake-holdersGovernmentConsumerProducerThird party

Effects before remedy Effects after remedy

Market Failure

(S)MPC

(D)MPB

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Pp

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Proposed Remedy - Tax

(S)MPC

(D)MPB

Q

P

Pp

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(S)MSC

tax

Pso

Qso

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Qt

(D)MSB

THANK YOUTHANK YOUTHANK YOUTHANK YOUTHANK YOUTHANK YOU

Thank you studentsThank you Mrs. Jorday

Sourceshttp://dukespace.lib.duke.edu/dspace/bitstream/10161/549/1/

MP_mbh15_a_200804.pdf

http://www.newscientist.com/article/dn14831

http://stats.oecd.org/glossary/detail.asp?ID=383

http://www.csrwire.com/PressRelease.php?id=1532

http://www.chicagoclimatex.com/