Benchmark-based emission allocation in a cap-and-trade system

Journal article (2002)

Authors

Heleen Groenenberg Universiteit Utrecht
K. Blok Universiteit Utrecht
Affiliation
External organisation
Benchmarking Emissions trading Grandfathering
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Published Date

01-01-2002

Language

English

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External organisation

Abstract

One of the important bottlenecks for the introduction of emission trading is how allowances should be distributed among the participants in a trading scheme. Both grandfathering on the basis of historic emissions and auctioning have important drawbacks. In this paper, we propose an allowance distribution rule based on benchmarking of production processes: each company’s share in the total allowance is determined by its production level and a reference emission level per product. The scheme shows some important advantages compared to other schemes.