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| Feng, Hongli; Zhao, Jinhua. |
| We examine the social efficiency of alternative intertemporal permit trading regimes. Banking with a 1-to-1 ratio and with a non-unitary intertemporal trading ratio (ITR) are compared with each other and with the no-banking permit trading regime. The more industry-wide shocks vary, and/or the more they are negatively correlated across time, the more efficient is a bankable permit regime. When the slope of the benefit function is greater than the slope of the damage function, banking with ITR=1+r is more efficient than a no-banking regime. Banking with ITR=1 can be more efficient than a no-banking regime. However, whether ITR=1 or ITR=1+r is better depends on the covariance structure of the shocks and the benefit and damage functions. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Bankable permits; Permit banking; Borrowing; Environmental Economics and Policy. |
| Ano: 2002 |
URL: http://purl.umn.edu/18543 |
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| Newell, Richard G.; Pizer, William A.; Zhang, Jiangfeng. |
| The political economy of environmental policy favors the use of quantity-based instruments over price-based instruments (e.g., tradable permits over green taxes), at least in the United States. With cost uncertainty, however, there are clear efficiency advantages to prices in many cases, especially for stock pollutants such as greenhouse gases. The question arises, therefore, of whether one can design flexible quantity policies that mimic the behavior of price policies, namely stable permit prices and abatement costs. We explore a number of "quantity-plus" policies that replicate the behavior of a price policy through rules that adjust the effective permit cap for unexpectedly low or high costs. They do so without necessitating any monetary exchanges... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Tradable permit market; Prices; Quantities; Banking; Borrowing; Uncertainty; Demand and Price Analysis; Q28; Q48; D8; L51. |
| Ano: 2003 |
URL: http://purl.umn.edu/10524 |
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