Skip to main content
SpringerLink
Log in

Economic, institutional and technological uncertainties of emissions trading—a system dynamics modeling approach

  • Published:
Climatic Change Aims and scope Submit manuscript

Abstract

System dynamics models are employed for analyzing the impact of different uncertainties on carbon emission trading–both on national and business levels. Economic, institutional and technological uncertainties significantly influence any country's benefits from emission permit trading. If a country participates in trading on the international market then the possible price range becomes the source of additional uncertainty. In the case of business investment decisions for implementing resource‐saving technology, our system dynamics model shows that the first‐mover investor will get significantly fewer advantages than his followers, which leads to delay in primary investment to the sector.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8
Fig. 9
Fig. 10
Fig. 11
Fig. 12
Fig. 13

Similar content being viewed by others

References

  • Alexeeva-Talebi V, Anger N (2009) Developing supra-european emissions trading schemes: an efficiency and international trade analysis. Conference on the International Dimensions of Climate Policies, University of Bern, Bern, Switzerland, 21–23 January 2009

  • Avi-Yonah R, Uhlmann D (2009) Combating global climate change: why a carbon tax is a better response to global warming then cap and trade. Stanford Environment Law Journal, No 3, 28, University of Michigan Law School

  • Blyth W, Bunn D (2011) Coevolution of policy, market and technical price risks in the EU ETS. Energy Pol 39:4578–4593, Elsevier

    Article  Google Scholar 

  • Chontanawat J, Hunt L, Pierse R (2006) Causality between energy consumption and GDP: evidence from 30 OECD and 78 non-OECD countries. Surrey Energy Economics Centre (SEEC), Department of Economics Discussion Papers (SEEDS), 113, Department of Economics, University of Surrey, Surrey, UK, Jun 2006

  • CPA Australia (2009) Climate change policy: carbon tax versus an emissions trading scheme–the debate between experts. ISBN 978-1-876874-23-0

  • Deissenberg C, Pickl S (2004) An algorithmic solution to the Kyoto game. In: Sachkov YL (ed) Generalized solutions in control problems IFAC. Fizmatlit, Moscow, pp 343–351

    Google Scholar 

  • Gapminder Foundation (2008) Gapminder. http://www.gapminder.org/ (24.02.2009)

  • Hoppe H (2000) Second-mover advantages in the strategic adoption of new technology under uncertainty. Int J Ind Organ 18:315–338

    Article  Google Scholar 

  • Hu B, Pickl S (2010) Analysis and design of international emission trading markets applying system dynamics techniques. Daniel M. Dubois (Hrsg.): Computing Anticipatory Systems: CASYS ‘09: Ninth International Conference on Computing Anticipatory Systems, AIP Conference Proceedings, Volume 1303, 408–415

  • Laurikka H, Koljonen T (2006) Emissions trading and investment decisions in the power sector—a case study in Finland. Energy Pol 34:1063–1074, Elsevier

    Article  Google Scholar 

  • Pickl S (1998) Der τ-value als Kontrollparameter–Modellierung und Analyse eines Joint-Implementation Programmes mithilfe der dynamischen kooperativen Spieltheorie. Shaker Verlag, Aachen, 198 pages

    Google Scholar 

  • Pickl S (2001) Optimization of the TEM Model–co-funding and joint international emissions trading. Operations Research Proceedings 2000 (Selected Papers). Springer, Berlin, Heidelberg, pp 113–118

  • Pickl S (2008) Climate change, sustainable development and risk: realizing a financial fonds within the TEM model as an economic and business opportunity. In: Hansjürgens B, Antes R (eds) Climate change, sustainable development and. Physica Publishers, pp 145–156

  • Pickl S, Kropat E, Hahn H (2010) The impact of uncertain emission trading markets on interactive resource planning processes and international emission trading experiments. Clim Chang 103(1–2):327–338, Springer

    Article  Google Scholar 

  • Schenker O (2011) How uncertainty reduces greenhouse gas emissions. Research Paper, Universität Bern, http://mpra.ub.uni-muenchen.de/29591/1/MPRA_paper_29591.pdf (01.07.2011)

  • Stalk G Jr (1988) Time–the next source of competitive advantage. Harv Bus Rev 66(4):41–51

    Google Scholar 

  • UNFCCC (2009) Kyoto protocol. 14.01.2009, http://unfccc.int/kyoto_protocol/items/2830.php (02.03.2009)

  • United Nations Web Services Section, Department of Public Information (2008) Image & reality: questions and answers. About the United Nations, http://www.un.org/geninfo/ir/index.asp (22.02.2009)

  • Wittneben B (2009) Exxon is right: let us re-examine our choice for a cap-and-trade system over a carbon tax. Energy Pol 37:2462–2464

    Article  Google Scholar 

  • Yang M, Blyth W, Bradley R, Bunn D, Clarkk C, Wilson T (2008) Evaluating the power investment options with uncertainty in climate policy. Energy Econ 30:1933–1950, Elsevier

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Baikal National University of Economics and Law, Irkutsk, Russia

    Irina Dolgopolova

  2. Universität der Bundeswehr München, Neubiberg, Germany

    Bo Hu, Armin Leopold & Stefan Pickl

Authors
  1. Irina Dolgopolova
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Bo Hu
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Armin Leopold
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Stefan Pickl
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Bo Hu.

Additional information

This article is part of a Special Issue on “Third International Workshop on Uncertainty in Greenhouse Gas Inventories” edited by Jean Ometto and Rostyslav Bun.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Dolgopolova, I., Hu, B., Leopold, A. et al. Economic, institutional and technological uncertainties of emissions trading—a system dynamics modeling approach. Climatic Change 124, 663–676 (2014). https://doi.org/10.1007/s10584-013-1006-y

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10584-013-1006-y

Keywords

Search

Navigation