| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Correct (and misleading) arguments for using market based pollution control policies
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| Autores: |
Karp, Larry S.
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| Data: |
2008-08-29
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| Ano: |
2008
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| Palavras-chave: |
Tradable permits
Coordination games
Multiple equilibria
Global games
Regulatory uncertainty
Climate change policies
California AB32
Environmental Economics and Policy
Research Methods/ Statistical Methods
C79
L51
Q58
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| Resumo: |
Disagreement over the form of regulation of greenhouse gasses motivates a comparison of market based and command and control policies. More efficient policies can increase aggregate marginal abatement cost, resulting in higher emissions. Multiple investment equilibria and “regulatory uncertainty” arise when firms anticipate command and control policies. Market based policies eliminate this uncertainty. Command and control policies cause firms to imitate other firms’ investment decisions, leading to similar costs and small potential efficiency gains from trade. Market based policies induce firms to make different investment decisions, leading to different costs and large gains from trade. We imbed the regulatory problem in a “global game” and show that the unique equilibrium to that game is constrained socially optimal.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
http://purl.umn.edu/42868
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| Relação: |
University of California, Berkeley>Department of Agricultural and Resource Economics>CUDARE Working Papers
CUDARE Working Papers
1063
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| Formato: |
24
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