| The proposed Domestic Emission Trading System in Canada included an offset market that was expected to provide cost-efficient carbon offsets to the Large Final Emitters. The objective of this thesis was to design an economic experiment that incorporated this institutional design. The experimental design included both regulated and non-regulated sectors and is based on a "cap and trade" carbon emission model. Three markets are included in the experimental design; timber, carbon, and electricity. The electricity sector represents the regulated sectors with a carbon emission cap while the forestry sector represents the non-regulated sectors, i.e. they do not have a carbon emission cap. The decision making framework of the forestry sector is based on a joint-product model; i.e. timber and carbon. The price of carbon offset credits impacts both timber and electricity supply. |
