Keywords: emissions trading, climate change, carbon tax, energy taxation
Greenhouse gas abatement and tradable emission permits in open economies; a comment on Kalle Maatta's paper
The topic of this paper is the question of what would be an optimum solution for a country or a greater region that wants to become a forerunner in the abatement of greenhouse gases. Tradeable emission permits are identified as being most beneficial from an environmental efficiency point of view especially in a case where trading takes place between energy companies in countries with reliable trade statistics and stable political institutions. Other options are to include carbon dioxide among the regulated emissions or to introduce a carbon tax where revenues from certain well-targeted energy intensive industries are recycled in a neutral manner.