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Date of Graduation
Bachelor of Science (BS)
Department of Economics
Scott R. Milliman
William C. Wood
Numerous policy makers around the world have implemented carbon dioxide (CO2) cap and trade programs in an effort to combat global climate change. However, under this policy option emitters face incentives to both overstate prior emission levels and then exaggerate emissions reductions induced by regulation. I first build a simple conceptual model which demonstrates these incentives for fraud, and then outline institutional conditions which could plausibly enhance, or else reduce, firm incentives to disseminate erroneous emissions data under this policy option. Next I analyze real world evidence suggesting that duplicitous emissions data, particularly for the pre-regulatory period, is a serious concern for cap and trade programs. I conclude by suggesting strategies for enhancing the accuracy of firm emission data under this policy option.
Beck, Kyle, "Are firm emissions data likely to be accurate under carbon-dioxide cap & trade programs? An economic analysis" (2019). Senior Honors Projects, 2010-2019. 649.