Bernard, AlainVielle, MarcViguier, Laurent2008-02-192008-02-192008-02-19200510.3917/ecop.169.0171https://infoscience.epfl.ch/handle/20.500.14299/18823The article assesses the European Directive on CO2 emission quotas using the GEMINI-E3 model. After summarizing the Directive and briefly describing the model, we present and analyze scenarios for different potential allocation rules. While the European quota mechanism creates a single market for eligible firms, it can also cause distortions vis-à-vis other economic sectors in each country. The arrangement does yield a single carbon price for all eligible firms, but a different carbon price for other sectors—with variations from country to country. The resulting excess costs can be significantKyoto Protocoltradable emission permitscomputable general equilibrium modelEuropean Union policyinternational agreementsNCCR-Climatetext::journal::journal article::research article