✦ LIBER ✦

What have we learned from emissions trading experiments?

✍ Scribed by R. Andrew Muller; Stuart Mestelman

Publisher: John Wiley and Sons
Year: 1998
Tongue: English
Weight: 142 KB
Volume: 19
Category: Article
ISSN: 0143-6570
DOI: 10.1002/(sici)1099-1468(199806/08)19:4/5<225::aid-mde888>3.0.co;2-v

No coin nor oath required. For personal study only.

✦ Synopsis

Emissions trading is a form of environmental regulation in which a regulatory body specifies the total allowable discharge of pollutants, divides this cap into individual permits assigned to individual polluters, and allows trading of the resulting permits. Laboratory experiments, in which paid subjects participate in controlled markets, can be used to test both proposals for emission trading and the theories on which they are based. This paper surveys the laboratory research that has investigated the efficiency of emission trading programs, the role of alternative instruments and institutions, the effects of allowing firms to carry inventories of permits, and the extent to which market power can be exercised.

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