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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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