Data/hora: 17/06/2024 14:42:20

Provedor de dados: | 31
País: | United States
Título: | Correct (and misleading) argument for using market-based pollution control policies
Autores: | Karp,   Larry S.
Data: | 2008-05-09
Ano: | 2008
Palavras-chave: | Tradable permits; Coordination games; Multiple equilibria; Global games; Regulatory uncertainty; Climate change policies; California AB32; Environmental Economics and Policy; C79; L51; Q58.
Resumo: | One argument in favor of market based pollution control policies is sometimes exaggerated, and a different argument is usually ignored. Regardless of whether investment is fixed or endogenous, market based policies might lead to a higher or lower equilibrium abatement compared to the level under command and control policies. Therefore, economists should be cautious about trying to convince anti-market environmentalists of the benefit of market based policies on the grounds that these promote environmental goals. However, market based policies reduce regulatory uncertainty. Under command and control emissions policies, there are multiple rational expectations competitive equilibria at the investment stage. From the standpoint of individual firms, this multiplicity looks like regulatory uncertainty. Market based policies eliminate this uncertainty. These results hold in an environment with common knowledge about market fundamentals. In a global games setting the unique investment equilibrium under command and control emissions policies is constrained efficient.
Tipo: | Conference Paper or Presentation
Idioma: | Inglês

Identificador:

29713

http://purl.umn.edu/6030

Relação:

American Agricultural Economics Association&gt;2008 Annual Meeting, July 27-29, 2008, Orlando, Florida

Selected Paper

Formato: | 30