<p>It is widely known that the efficient emissions reduction (cost-minimizing emissions reduction) requires the equalization of marginal abatement cost across all emissions sources. Using a multi-sector static computable general equilibrium model for Japan, this paper quantitatively evaluates efficiency of emissions trading and voluntary action by firms. In particular, we compare emissions trading for all sectors and emissions trading for limited sectors and compare emissions trading and voluntary action by firms. Our main results are summarized as follows. First, we show that emissions trading for limited sectors is less efficient than emissions trading for all sectors. Second, we show that voluntary reduction by firms are less efficient than emissions trading for all sectors.</p>
ENVIRONMENTAL SCIENCE 30 (2), 141-149, 2017
SOCIETY OF ENVIRONMENTAL SCIENCE, JAPAN