A1 Refereed original research article in a scientific journal

Lurking in the shadows: The impact of CO2 emissions target setting on carbon pricing in the Kyoto agreement period




AuthorsQuinn Barry, Gallagher Ronan, Kuosmanen Timo

PublisherElsevier (Commercial Publisher)

Publication year2023

JournalEnergy Economics

Article number106338

Volume118

eISSN1873-6181

DOIhttps://doi.org/10.1016/j.eneco.2022.106338

Web address https://www.sciencedirect.com/science/article/pii/S0140988322004674

Self-archived copy’s web addresshttps://www.pure.ed.ac.uk/ws/files/321398784/QuinnEtalEE2022LurkingInTheShadows.pdf


Abstract

This paper is a case study of the impact of CO2 emissions target setting. We empirically investigate the targets set during the Kyoto Protocol period using a convex nonparametric least squares system, quantile regressions, and a comprehensive data set of 125 countries. Our findings reveal CO2 marginal abatement costs, which: (1) are significantly higher for target setting countries; (2) increase over the sample period; (3) and are an order of magnitude greater than the prevailing emissions pricing mechanisms. The results provide insights into the consequences of policies to curb unwanted by-products in a regulated system and shed light on the price efficiency of carbon markets. Furthermore, we contribute to the debate on emission reduction standard-setting and highlight the importance of shadow price estimates when regulating market instabilities in an emission trading scheme.



Last updated on 2025-27-03 at 21:41