The Role of Abatement Costs in GHG Permit Allocations: A Global Stabilization Scenario Analysis

Our objective is to propose permit allocation schemes that lead to a fair distribution of the net abatement cost among regions in a global greenhouse gas (GHG) stabilization scenario. We use a detailed technology-based energy model, World-MARKAL, to determine efficient abatement decisions, and to calculate the regional gross abatement costs (before permit allocation and trading). The net abatement costs are then calculated and used for different permit allocation schemes.

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