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Emissions Trading Subject to Kantian Preferences


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Title: Emissions Trading Subject to Kantian Preferences
Authors: Hennlock, Magnus
Löfgren, Åsa
Sterner, Thomas
Martinsson, Peter
Issue Date: Jan-2018
Extent: 46
Publication type: report
Organization: Dept. of Economics, University of Gothenburg
Series/Report no.: Working Papers in Economics
718
Keywords: emissions trading
emissions allowances
carbon markets
public goods
ethics
Kant
Abstract: We study a cap-and-trade market equilibrium where different regions belonging to an emissions trading regime have different ambitions about the stringency of the cap. Specifically, we introduce a segment of consumers with Kantian preferences and show that they would prefer a more stringent cap compared to other regions. When a region sets up a voluntary more stringent cap within a cap-and-trade market, dual carbon markets with dual prices on allowances can emerge with trade against both caps. We... more
ISSN: 1403-2465
Description: JEL: D63, D62, D03, Q54
URI: http://hdl.handle.net/2077/55031
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