The aim of this thesis is to address certain aspects of climate change which have not attracted sufficient attention. The first part is an empirical one investigating impacts of climate change on households and individuals using the hedonic price approach (for Great Britain and Germany). In addition, we examine the relationship between climate and happiness (for 67 countries). The second part of the thesis is an analytical one in the field of emissions permit trading. As progress in the international negotiations is extremely slow and failure is not excluded we first consider the coordination of domestic markets for tradable emission permits where countries determine their own emission reduction targets. Another aspect which has not attracted sufficient attention is the time-dimension of a trading scheme. We analyse the dynamic aspects of allocating emission rights for different approaches in the final chapter.

Katrin Rehdanz
Economic Aspects of Climate Change
ISBN 10: 3-86573-028-0
ISBN 13: 978-3-86573-028-2
210 S. 25 EUR. 2004 (Diss.)

Acknowledgements . . . . . vii
Table of contents . . . . . ix
List of tables . . . . . xii
List of figures . . . . . xiii

Part I Introduction . . . . . 1
1 Introduction
1.1 Overall introduction
1.2 Climate, climate change and the enhanced greenhouse effect
1.3 Economics and climate change
1.4 Outline of the thesis

Part II Economic impacts of climate change: The amenity value of climate . . . . . 17
2 The hedonic price approach
2.1 A review of the approach
2.1.1 A model to measure the value of amenities
2.1.2 A critique of the approach
2.1.3 Existing literature measuring the amenity value of climate
2.2 The amenity value of climate to British households
2.2.1 Introduction
2.2.2 Data sources
2.2.3 Empirical analysis
2.2.4 The implicit prices of climate
2.2.5 Implicit prices of climate change
2.2.6 Conclusion
2.3 The amenity value of climate to German households
2.3.1 Introduction
2.3.2 Empirical analysis
2.3.3 Discussion
2.3.4 Conclusions
Appendix
3 An alternative approach: Climate and happiness
3.1 Introduction
3.2 Literature review
3.2.1 Happiness in economics
3.2.2 Environmental valuation techniques
3.3 Empirical analysis
3.4 Results
3.5 The influence of climate change
3.6 Conclusion
Appendix

Part III Environmental policy responses: Design issues of emission permit trading . . . . . 99
4 Unilateral regulation of bilateral trade in greenhouse gas emission permits
4.1 Introduction
4.2 The case of two domestic emissions markets
4.3 Domestic regulation of a bi-national market
4.3.1 Quantity instruments: Carbon discounts and import quota
4.3.2 Price instrument: Tariff
4.3.3 Cost comparison of the different instruments
4.4 Emissions
4.5 Compliance and liability
4.5.1 Comparison of buyers' and sellers' liability
4.5.2 Compliance, liability and emissions
4.6 Discussion and conclusion
Appendix
5 On multi-period allocation of tradable emission permits
5.1 Introduction
5.2 The market
5.3 Dynamic allocation
5.3.1 Alternative allocations
5.3.2 A numerical illustration
5.5 Banking and borrowing
5.6 Constrained banking and borrowing
5.7 Discussion and conclusion
Appendix

Part IV Conclusion . . . . . 161
6 Conclusion

References . . . . . 171

Summary . . . . . 189

Zusammenfassung . . . . . 193