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| van Benthem, Arthur A.; Kerr, Suzi. |
| Voluntary opt-in programs to reduce emissions in unregulated sectors or countries have spurred considerable discussion. Since any regulator will make errors in predicting baselines and participants will self-select into the program, adverse selection will reduce efficiency and possibly environmental integrity. In contrast, pure subsidies lead to full participation but require large financial transfers. We present a simple model to analyze this trade-off between adverse selection and infra-marginal transfers. We find that increasing the scale of voluntary programs both improves efficiency and reduces transfers. We show that discounting (paying less than full value for offsets) is inefficient and cannot be used to reduce the fraction of offsets that are... |
| Tipo: Conference Paper or Presentation |
Palavras-chave: Environmental Economics and Policy; Deforestation; Offsets; Adverse selection; REDD; Climate change policy; Opt-in.. |
| Ano: 2011 |
URL: http://purl.umn.edu/100569 |
