LIMITING OVERSELLING IN INTERNATIONAL EMISSIONS TRADING I: 
Costs and Environmental Impacts of Alternative Proposals

Working Paper No. 10

ISBN: 87-550-2971-5 (Internet: 87-550-2953-1)
ISSN: 1025-2258

Contents

Executive Summary

1. Introduction
1.1 Approach
1.2 Measures of performance
1.3 Structure of the document

2. Model Structure
2.1 Overview
2.2 The buyer
2.3 The CDM seller
2.4 The JI seller
2.5 The IET seller
2.6 Calculation of demand
2.7 Matching supply and demand
2.8 Actual emissions
2.9 Compliance
2.10 Compliance costs
2.11 Sensitivity tests
2.12 Model validation
2.13 Reference case

3. Analysis of Liability Proposals
3.1 Issuer liability subject to sanctions for non-compliance
3.2 Issuer liability subject to eligibility requirements
3.3 Annual retirement of AAUs equal to actual emissions
3.4 Limits on sales of AAUs
3.5 Sales prohibited until compliance established
3.6 Sales limited to AAUs surplus to a permanent reserve
3.7 Swiss Proposal -Sales limited to AAUs surplus to the seller compliance plan
3.8 Sales limited to AAUs surplus to defined compliance plan
3.9 Compliance reserve
3.10 Compulsory insurance
3.11 Escrow account
3.12 User liability
3.13 Shared liability
3.14 Double liability
3.15 Traffic light

4. Comparison of Liability Proposals and Conclusions
4.1 Cautionary note
4.2 Comparison of liability proposals
4.3 Sensitivity tests
4.4 Treatment of ERUs Under the Liability Proposals

References