Carbon Emission Allocation and Efficiency of EU Countries

Ming-Chung Chang

Department of Banking and Finance, Kainan University, Taiwan, China.

DOI: 10.4236/me.2012.35078                

Abstract

Reduction of CO2 emissions is increasingly important among countries that want to protect the environment against global warming and climate change. This study examines two methods of CO2 emission reduction—CO2 emission allowance and an international agreement—by applying the Zero Sum Gains Model and the Cooperation and Alliance Model. We conclude that all DMUs reach 100% efficiency after trading on the CO2 emission allowance. The international agreement also improves the average efficiency of all DMUs, but its effect is inferior to the trading of the CO2 emission allowance.

Keywords

CO2 Emission Allowance; International Agreement

Conflicts of Interest

The authors declare no conflicts of interest.

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