Environmental rights on the futures marketsan application to the dutch manure market

✍ Scribed by J. M. E. Pennings; M. T. G. Meulenberg; W. J. M. Heijman

• Publisher: Springer
• Year: 1996
• Tongue: English
• Weight: 875 KB
• Volume: 7
• Category: Article
• ISSN: 0924-6460
• DOI: 10.1007/bf00420428

✦ Synopsis

A study was carried out to analyze futures markets for tradable rights after a cash market was initiated. Furthermore, some indication was given on the size of such a futures market to provide insight into its viability. Futures markets can play a role in solving environmental problems, by making the market for pollution rights (i.e. P205 rights) and agro rights (milk rights, sugar rights and P205 rights) more effective and transparent. Moreover, the market for tradable rights would be able to meet the users' need for hedging. This paper investigated the possibility of introducing a futures markets for tradable P205 rights and the commodity manure. Because there is already a cash market for manure, although not well developed yet, and there will be a cash market for P20~ rights, a futures market is a logical sequel. The futures market can play a role in implementing agricultural policy efficiently and with respect to manure and P205 rights can be an economically efficient solution to environmental problems.