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Market Power in Tradable Emission Markets: A Laboratory Testbed for Emission Trading in Port Phillip Bay, Victoria AgEcon
Cason, Timothy N.; Gangadharan, Lata; Duke, Charlotte.
In theory, competitive emission permit markets minimise total abatement cost for any emission ceiling. Permit markets are often imperfectly competitive, however, if they are thin and dominated by large firms. The dominant firm(s) could exercise market power and increase other firms’ costs of pollution control, while reducing their own emission control costs. This paper reports a testbed laboratory experiment to examine whether a dominant firm can exercise market power in a permit market organised using the double auction trading institution. Our parameters approximate the abatement costs of sources in a proposed tradable emissions market for the reduction of nitrogen in the Port Phillip Watershed in Victoria, Australia. We vary across treatments the...
Tipo: Conference Paper or Presentation Palavras-chave: Market Power; Emission Permits; Experiments; Environmental Regulation; Environmental Economics and Policy; C91; Q25; Q28.
Ano: 2003 URL: http://purl.umn.edu/57841
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Do Community Characteristics Determine Environmental Outcomes? Evidence from the Toxics Release Inventory AgEcon
Arora, Seema; Cason, Timothy N..
This research uses neighborhood characteristics (at the zipcode level) to explain changes in toxic releases between 1990 and 1993. It combines the Toxics Release Inventory data with demographic data from the 1990 US Census. We first analyze the location of manufacturing facilities in a particular neighborhood using a sample selection model, and then attribute changes in the level of emissions between 1990 and 1993 to the demographic and socio-economic characteristics of the neighborhood in 1990. The results indicate that variables likely to affect the propensity for communities to engage in political action significantly influence environmental performance. Economic characteristics of neighborhoods (such as income levels and unemployment) also affect...
Tipo: Working or Discussion Paper Palavras-chave: Environmental Economics and Policy; Q00.
Ano: 1996 URL: http://purl.umn.edu/10531
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What Can Laboratory Experiments Teach Us About Emissions Permit Market Design? AgEcon
Cason, Timothy N..
The laboratory provides a test bed to inform many design choices for emissions permit markets. Experiments are sometimes strongly motivated and structured by specific theoretical models and predictions, but in other cases the experiment itself can be the model of the market and regulatory environment. We review specific experimental applications that address design issues for permit auction rules, permit expiration dates and banking, liability rules, and regulatory enforcement.
Tipo: Journal Article Palavras-chave: Cap-and-trade; Auctions; Liability; Regulation; Compliance; Banking; Environmental Economics and Policy; Institutional and Behavioral Economics.
Ano: 2010 URL: http://purl.umn.edu/90819
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An Experimental Investigation of Hard and Soft Price Ceilings in Emissions Permit Markets AgEcon
Perkis, David F.; Cason, Timothy N.; Tyner, Wallace E..
Tradable emissions permits have been implemented to control pollution levels in various markets around the world and represent a major component of legislative efforts to control greenhouse gas (GHG) emissions in the United States. Because permits are supplied for a fixed level of pollution, allowing the market for permits to determine the price, there is a desire for price control mechanisms which would protect firms otherwise susceptible to price spikes caused by fluctuations in the demand for pollution abatement. We test permit markets in an experimental laboratory setting to determine the effectiveness of several price control mechanisms. Evidence suggests that both permit supply adjustments and traditional price ceilings (hard ceilings) effectively...
Tipo: Presentation Palavras-chave: Tradable Emissions Permit Market; Price Controls; Hard Ceiling; Soft Ceiling; Experimental Economics; Environmental Economics and Policy; Institutional and Behavioral Economics; Resource /Energy Economics and Policy.
Ano: 2012 URL: http://purl.umn.edu/124096
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