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Summary 6: Allocating Emissions Units
Abstract
New Zealand firms will be better off overall if we meet our international obligations with an emissions trading system than without. Some groups will however win while others lose. With no free allocation of emission units, the distribution of costs across the economy is equivalent to under a carbon tax. There will be one-off costs/gains to ‘stranded assets’ when the system is introduced. Stranded assets are capital assets (including land, forests and human skills specific to a particular industry) that are suddenly worth a different amount once the system is introduced.
Citation
Motu Research. 2007. "Allocating Emissions Units," Summary 6 from the series Introduction to Emissions Trading, produced as part of the Climate Change Policy Dialogue.
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