1. Introduction. 1.1 Introduction. 1.2 Climate change, the Kyoto protocol and beyond. 1.3 Market-based climate policy, public goods and property rights. 1.4 The Kyoto mechanisms, institutional features and competitive advantages. 1.5 The emerging international greenhouse gas market. 1.6 Objective and approach of the book. 1.7 Overview of the book.
Part I. Institutional Economics.
2. Design and implementation of market-based climate policy. 2.1 Introduction. 2.2 Tradeable emission rights and the private sector. 2.2.1 Domestic permit trading design. 2.2.2 Downstream permit trading with upstream monitoring. 2.3 Project-based emissions trading and the private sector. 2.4 Economic versus political hierarchy in market-based climate policy? 2.4.1 The theoretical superiority of permit trading in economics. 2.4.2 The problematic acceptability of permit trading in politics. 2.5 Some drawbacks of the existing literature. 2.6 Conclusion.
3. Path dependence and lock-in of market-based climate policy. 3.1 Introduction. 3.2 Definitions of institutional path dependence and lock-in. 3.3 Conditions for an institutional lock-in. 3.3.1 The superior alternative, imperfect markets and incomplete information. 3.3.2 Self-reinforcement, positive feedbacks and political transaction costs. 3.3.3 Probability, inevitability and remediableness. 3.4 Conditions for an institutional break-out. 3.4.1 Information, perceptions and experiments. 3.4.2 Problem-solving, crises and learning. 3.4.3 Switching costs, legal compatibilities and societal change.
3.5 The superiority of the superior alternative contested. 3.6 Novelties of an institutional path dependence approach. 3.7 A path-dependent climate policy? 3.8 Conclusion.
Part II. New Institutional Economics.
4. Environmental effectiveness of market-based climate policy. 4.1 Introductio