Assume the initial price of carbon is higher in the EU ETS. Do NZ ETS net buyers of emissions permits gain or lose? Do EU ETS net sellers of emissions permits gains or lose? Briefly explain in less than 60 words
If the initial price of carbon is higher in the EU ETS, NZ ETS net buyers of emissions permits would lose because they would have to pay more for the permits. On the other hand, EU ETS net sellers of emissions permits would gain because they would receive higher prices for the permits they sell.
In this scenario, NZ ETS net buyers of emissions permits would lose because they'll have to pay a higher price for the permits in the EU ETS market. On the other hand, EU ETS net sellers of emissions permits would gain because they can sell their permits at a higher price to the NZ ETS buyers.
