Robert Stavins: Low Prices a Problem? Making Sense of Misleading Talk about Cap-and-Trade in Europe and the USA
A cap-and-trade system — if well designed, implemented, and enforced — will limit total emissions of the regulated pollutant to the desired level (the cap), and will do this (if the cap is binding) in a cost-effective manner, by leading regulated sources to each make reductions until they are all experiencing the same marginal abatement cost (the allowance price). Thus, the sources that initially face the highest abatement costs, reduce less, and those sources that face the lowest abatement costs, reduce more, achieving system-wide minimum costs, that is, cost effectiveness. So, the purpose and promise, in a nutshell, is to achieve the targeted level of aggregate pollution control, and — if the cap is binding — do this at the lowest possible cost.
27 Apr 2012 13:56
Luxury fashion group PPR, which owns clothing labels including Gucci, Yves Saint Laurent and Puma, h…